Oral Answers to Questions

WORK AND PENSIONS

The Secretary of State was asked—

Child Support Agency

Geoffrey Clifton-Brown: In how many cases where the independent case examiner found in favour of the applicant the decision was subsequently not implemented by the Child Support Agency, in the last year for which figures are available.

James Plaskitt: The agency makes special payments both on the basis of decisions made by its chief executive and on the basis of recommendations by the independent case examiner. The CSA accepts the findings of the examiner in all cases except when it believes that the examiner's findings were based on erroneous information. It estimates that that has applied to only a handful of cases in the last two years.

Geoffrey Clifton-Brown: I wish to draw attention to a case of which I gave the Minister prior notice—that of Mrs. Sonia Poulton, who lives in Cirencester. The case dates back as far as June 2001. I finally referred it to the independent case examiner in August 2004 after protracted correspondence. A year later, in August 2005, the examiner ruled that there were serious shortcomings in the way in which the CSA had handled the case, that compensation was to be paid for the £5,100 arrears, and that an apology should be given. Since then, the CSA has prevaricated. It has changed its mind about what the compensation should be with a stroke of the pen on numerous occasions, sometimes to the tune of many thousands of pounds.
	I re-referred the case to the independent case examiner, and heard from her on 31 January 2006. Her letter stated:
	"I regret that I cannot take matters forward without giving the Agency a chance to resolve matters."
	This case is dreadful. It needs to be resolved. The CSA is out of control, with no effective right of appeal. Will the Minister look into the matter personally, so that my constituent can receive the proper justice that she deserves?

James Plaskitt: I can tell the hon. Gentleman that I have already done so. I have studied the case file, and I thank the hon. Gentleman for drawing it to my attention before Question Time. As he says, the delay in implementation of the independent case examiner's recommendations is essentially due to a dispute over the true level of arrears. I understand that the hon. Gentleman's constituent has now accepted an advance payment of arrears. I am assured that an attachment of earnings is in operation, that the hon. Gentleman's constituent is receiving maintenance payments, and that the agency is writing to her today. I hope that it will be able to clarify all the outstanding points.

David Taylor: Can the Minister confirm that the number of cases being referred to the independent case examiner is still on a steeply rising curve? Does that not demonstrate that any option for the agency's future other than its replacement by part of Her Majesty's Revenue and Customs would be doomed to failure?

James Plaskitt: In fact, the number of complaints referred to the independent case examiner is fairly steady. Last year, 2,973 cases were referred to her. She rejected 1,700 and took out 1,257. She issued orders for financial redress in 1,604 cases. Given that the rate of complaints is fairly steady and that the agency also receives complaints directly, amounting to 3 per cent. of the case load, the situation is not deteriorating. I do not agree with my hon. Friend that the fact that complaints are made necessarily suggests that the agency should be scrapped completely.

Peter Luff: What his most recent assessment is of the effectiveness of the Child Support Agency in securing maintenance from absent parents.

John Hutton: Although there has been recent improvement in some areas, the overall performance of the agency is unacceptable. We are currently looking at ways of improving the discharge of its core functions so that more families receive the right maintenance at the right time. I hope to make a statement shortly.

Peter Luff: I am partly encouraged by that answer, obviously, but I am increasingly sceptical about whether a rule-bound bureaucracy like the CSA is capable of dealing with the malicious ingenuity of men who avoid responsibility for children whom they have fathered. Will the Secretary of State look personally at two cases that have caused me particular concern? One involves a woman, a victim of domestic violence who cannot recover the arrears that she is owed by her ex-husband and is bizarrely having to pay him maintenance now. The other involves a woman who is struggling with debt as her ex-husband uses every trick in the book to avoid responsibility for his child. Will the Secretary of State review those cases personally, and assure me that the new CSA that he seems to be offering will really deal with such cases better?

John Hutton: As I said, I shall wish to make a statement to the House shortly, setting out what we need to do to resolve a situation that is clearly unacceptable. I will certainly look into the cases that the hon. Gentleman has mentioned. I hope that all Members on both sides of the House agree at least on this: while relationships all too often come to an end, responsibilities for children never do. That must be the bottom line in all cases.

Frank Field: I assure the Secretary of State that many Labour Members look forward to his statement and, hopefully, will support it. Will he be able to stress in that statement that while he will look for more effective ways of collecting maintenance in the future, we still need to make the CSA more effective for those who are currently trying to depend on it?

John Hutton: I agree with my right hon. Friend and I am sure that many people are looking forward to the statement that I plan to make. It is certainly true that there are no simple solutions to the situation that we now face in respect of the CSA, and I am grateful to him for his comments in that regard. I further agree that we must do all that we possibly can to ensure that the CSA discharges its functions—functions that, after all, we in this House gave to it—cost-effectively and efficiently. Our number one priority at all times must be to secure the maximum maintenance due to children.

David Laws: The last time that the House considered reform of the CSA, Ministers told us that threatening non-compliant parents with the loss of their driving licences would make them pay their dues. It is clear that that has not worked—only 11 driving licences have been withdrawn in the past five years. Will the Secretary of State undertake that when he makes his statement later on this week, there will be no more gimmicks or reviews, and that there will be a fundamental reform of this failing agency?

John Hutton: No, there will not be any gimmicks. We need to see a significant improvement in the CSA's performance on enforcement. On driving licences, it is worth bearing it in mind that, sometimes, the threat of such a sanction can have the desired effect, so if I were the hon. Gentleman I would not place too much emphasis on the instances in which that threat has been carried out.

Kevan Jones: Like the hon. Member for Mid-Worcestershire (Peter Luff), I have a number of cases in my constituency of men using the system to avoid making payments to former partners. In his forthcoming statement, will my right hon. Friend tackle the problem of self-employed people who use ingenious methods to avoid their liabilities?

John Hutton: Yes, we certainly will address that issue. It is common knowledge in all parts of the House that the current legal framework does not lend itself to efficient and effective enforcement. It is far too easy for far too many non-resident parents to evade their financial responsibilities to their children, and that must not be allowed to continue.

Douglas Hogg: Will the right hon. Gentleman tell the House what the arguments of principle or practice are against allowing the Revenue to collect maintenance at the same time as collecting tax?

John Hutton: As the right hon. and learned Gentleman knows, Ministers have addressed this issue from time to time—not least Ministers of his own Government, who decided not to proceed down that route, but instead to set up the CSA as a stand-alone agency. With great respect to him, I do not want to get into a detailed debate today about the various alternatives and options. I intend to make a statement to the House in the very near future, in which we will set out clearly how we want to address this issue. It is a very important one, and it is right and proper that Members have the opportunity to put their various points of view to me. We will then consider the best, most intelligent and sensible way in which we can take matters forward.

Rob Marris: My constituent, Mrs. X, is owed approximately £35,000 in maintenance going back some 12 years. When I took up her case last autumn, I discovered that no enforcement had ever taken place. The CSA is now saying that because some of that debt was accumulated more than seven years ago, it will not seek enforcement. Does my right hon. Friend think that is an acceptable state of affairs, and will he assure me that in his statement and in ensuing legislation—should it come along—that issue will be addressed?

John Hutton: I am not familiar with the details of the case to which my hon. Friend refers, but as he knows, there is of course a general bar on civil action against debt owed beyond a certain period. I made it clear in responding to the hon. Member for Mid-Worcestershire (Peter Luff) that the CSA's current performance against a range of measures is simply inadequate and unacceptable, and that is particularly true of enforcement. I spoke to the CSA's chief executive and urged him to improve its enforcement record, and I am very glad to say that there has been a significant increase in the number of cases that the CSA is proceeding to enforcement. That is right and proper, and we must keep this issue at the forefront of our minds as we consider the right way forward.

Philip Hammond: We look forward to the statement that the Secretary of State said he will make shortly. Will he take the opportunity during today's exchange to say something directly to the 900,000 or so families still trapped by the CSA's old assessment rules, the 330,000 families whose applications for child support payments are sitting unprocessed in CSA offices and the some 30 per cent. of parents with care who are not getting the child maintenance payments for which they have been assessed and to which they are entitled?

John Hutton: The conversion of old cases to the new scheme has been a sad and sorry saga. It has not been possible to find a sensible way to migrate those cases and I intend to speak about that shortly in this House. The backlog of cases that have not yet been properly assessed is totally unacceptable and I intend to address that problem, which I accept is chronic and serious, in my statement.

Philip Hammond: Indeed that is totally unacceptable, but it was not clear from the Secretary of State's response whether he accepts the Government's responsibility for this epic tale of managerial failure. Does he accept that the Government are responsible for what has happened in the CSA and the suffering caused to so many families by it? If he cannot assure the House of any early migration of the old rules cases to the new system, would he at least act—in the interests of fairness—to extend the £10 per week child maintenance premium to parents in receipt of those old rules payments?

John Hutton: Again, with great respect to the hon. Gentleman, I shall not make a series of announcements about those matters this afternoon. I intend to come to the House in the near future to make a statement about all of them. It is self-evident that the problem of conversion is well documented and it has proved to be immensely difficult to make the journey from the old scheme to the new one. Again, I am sorry not to be able to help the hon. Gentleman very much this afternoon, but I intend to come to the House and deal with that matter in the near future.

Bob Russell: If he will amend the Child Support Agency regulations relating to assessments involving company cars and payments in lieu to obtain cars for work purposes so that both categories are treated equally.

James Plaskitt: We have no plans to change the existing rules. Employees' earnings include monetary allowances, such as those provided to aid the purchase of private vehicles. However, earnings taken into account for child support purposes do not include benefits in kind, such as the provision of a car by a company to an employee.

Bob Russell: Will the Minister explain the principal reason why the two categories cannot be considered on equal merit?

James Plaskitt: Yes. The rules are currently drawn in such a way that they are aligned with other income-related benefits and the taxation system. There would be only two ways of achieving the goal that the hon. Gentleman suggested. The first would be to include the company car in the assessment, which would require the CSA to become an asset valuation agency—not a function we want to load on to it in addition to its existing tasks—and the second would be to exclude the car purchase payment. That would take the arrangement out of line with the benefit and tax system and, in any case, the trend nowadays is towards payment for car purchase. If we exempted that, many parents with care would have fairly robust views about it.

Benefit Fraud

Iain Wright: What his plans are to reduce fraud in the benefit system.

John Hutton: Fraud in income support and jobseeker's allowance has fallen by two thirds since 1997. Housing benefit fraud has fallen by a third. The amount of fraud is now at the lowest recorded level and we will continue to take steps to reduce these levels further in future. We are also taking more enforcement action. In 2004–05, in partnership with local authorities, 43,000 prosecutions and sanctions were imposed: a fourfold increase since 1998.

Iain Wright: I appreciate what my right hon. Friend is doing, but in its report of last year on dealing with complexities in the benefit system, the National Audit Office stated that
	"complex regulations may also make the system vulnerable to deliberate action by customers to falsify their circumstances or deliberately fail to report changes accurately or on time."
	That fraud could amount to £900 million a year. What steps are the Government taking to simplify the benefit system to reduce the risk of fraud or to allow it to be more easily detected?

John Hutton: I am grateful to my hon. Friend for making that important point. It is worth bearing in mind that the Public Accounts Committee has acknowledged the good progress that the Government have been making in recent years to tackle the serious problem of benefit fraud. Those who cheat and defraud the taxpayer must be prosecuted, because not only are they self-evidently breaking the law, they also undermine the legitimate claims of people on benefit, and we shall not tolerate that for a second either. In relation to my hon. Friend's specific point, chapter 7 of the recently published Green Paper on welfare reform set out a series of measures that will deal with the problem of complexity and benefit fraud. We are awaiting the response to the consultation, which will finish by the end of April.

Julie Kirkbride: Does the Secretary of State accept that the recently organised scam of the tax credit system, which involved a loss of many millions of pounds to the taxpayer, was in large part due to the fact that the Government have made it too easy to claim tax credit? Bearing in mind that it is a duty of the Government to ensure that people who receive benefits should be entitled to them, will the Secretary of State promise the House to make it somewhat more difficult to claim tax credits so that the taxpayer can have confidence that the system pays people who deserve it rather than those who do not?

John Hutton: All the arrangements for claiming tax credit, which is not a benefit, as the hon. Lady will know, have to be robust, because they involve public money and resources. She has offered her own interpretation of the events that led to that issue, and it is probably better for me as the Secretary of State to wait until the formal criminal proceedings and investigations are over before I add my ha'p'orth to the argument about how easy it is to claim benefits or about what the cause of that fraudulent series of applications might have been.

Madeleine Moon: Will my right hon. Friend tell us what steps he is taking to prevent the defrauding of the taxpayer by company directors who declare themselves bankrupt, leaving the Government to pick up redundancy and holiday costs for their work force, and subsequently set up a new company having failed to meet their obligations to their previous employees?

John Hutton: I do not want to pass the buck, but I am tempted to say that those are matters for my right hon. Friend the Secretary of State for Trade and Industry. In all such matters, the law has to be, and will be, properly enforced and if the Department for Work and Pensions can make a contribution to that process, of course we stand ready to do so.

Danny Alexander: Given that 4.5 million people access their benefits and pensions through the Post Office card account, is not the Secretary of State concerned that shifting that many people to a new form of payment when the contract ends will offer massive opportunities for fraud, as well as inconveniencing many people and causing a loss of income for post offices? Is not that yet another reason why the card account should be kept beyond 2010?

John Hutton: We have a clear understanding with the Post Office about the use of Post Office card accounts. It was always clear from the beginning that the contract—[Interruption.] Oh yes it was. It was absolutely explicit that the contract was to last until 2010. If the hon. Gentleman would like to see a copy of the contract, I should be happy to supply him with the details. I do not believe that he is right to draw a parallel between the use of the Post Office card account and BACS—the bankers automated clearing service—for benefit payments. With great respect to the hon. Gentleman, I do not think that he would say that BACS was inherently more susceptible to fraud; it processes hundreds of millions of transactions successfully for the DWP every year. It is a sign of the progress and modernisation of our benefits system that we are prepared to use BACS more widely and I am surprised that the Liberal Democrats seem not to recognise the progress and the efficiencies that the system represents for taxpayers.

Vera Baird: I understand that about £2.7 million was lost recently by the theft of about 7,000 identities of benefit staff. If those identities had been secured by three kinds of cross-checkable biometrics on the proposed national identity register, is it my right hon. Friend's considered view that the availability of those better checks might, or would, have protected any of those large pay-outs to the cost of the taxpayer?

John Hutton: As my hon. and learned Friend will know, it is difficult to be absolutely clear about that. I can be clear to the House about this, however: we estimate roughly that £50 million a year is lost in benefit fraud through the theft of other people's identities. We—at least on the Labour Benches—are prepared to invest in new technology, where appropriate, such as biometric identification on identity cards, to tackle the problem of benefit fraud. The Conservative party, which used to trumpet its reputation as the party of value for money and defence of taxpayers' interests—

Mr. Speaker: Order.

Gershon Review

Ben Wallace: If he will meet members of his Department from the departmental site at Norcross to discuss the implications of the Gershon review for the Department.

Anne McGuire: As the hon. Gentleman is aware, I have previously visited staff and their trade union representatives at Warbreck hill, nearby in Blackpool. I plan to visit the Norcross site in the very near future.

Ben Wallace: I am grateful to the Minister for that answer. The day after the Adjournment debate that I initiated and to which the Minister responded last week, 77 employees at the Norcross site were told that they were surplus to requirements. Will she now concede that the implementation of the Gershon review in her Department is incoherent? Will she give an undertaking to meet the employees from Norcross in my constituency with me, so that we can discuss the failures of her Department to manage the changes appropriately?

Anne McGuire: The hon. Gentleman needs to realise that there is a difference between staff being declared surplus to requirements and staff being made redundant. In fact, he quite rightly identifies that 77 staff have been declared surplus to their current posts, and a great deal of activity is going on in the Department to ensure that those staff will be redeployed either in other businesses in the DWP or with other Departments. I reiterate to the hon. Gentleman that, as I said during the Adjournment debate, there have been no compulsory redundancies in the Fylde area.

Joan Humble: May I thank my hon. Friend for the reassurances that she gave to me and the hon. Member for Lancaster and Wyre (Mr. Wallace) last week, but is she aware that there is a lot of interaction between the site at Norcross and the other large sites on the Fylde coast? When individuals are made redundant at Norcross, they are offered opportunities at those other sites. So when she visits, will she consider the job situation in the context of civil service jobs overall on the Fylde coast?

Anne McGuire: I thank my hon. Friend for the question—she has taken every bit as active an interest in the situation at Fylde as the hon. Member for Lancaster and Wyre (Mr. Wallace), who asked the primary question—but I trust that hon. Members will not assume that because jobs are declared surplus, there will be redundancies. In fact, I repeat that there have been no compulsory redundancies on the Fylde coast.

Tim Boswell: With so many staff in the Department, both at the important Norcross site and elsewhere, under pressure to meet Gershon efficiency targets and with staff cuts in the Child Support Agency apparently impossible while its problems persist, does not the Minister appreciate that that throws yet further strain on the morale of all other parts of the Department and threatens its ability to achieve its agreed targets without an unacceptable decline in the quality of service to the public?

Anne McGuire: I am sure that the hon. Gentleman will not mind me reminding him that if we had implemented the James report, which the Conservative party introduced, even more cuts would have been made. We have achieved a reduction of 14,000 full-time equivalent jobs, and we are continuing to place the emphasis on our staff delivering for our customers. May I correct just one part of the hon. Gentleman's question that is inaccurate? In fact, the CSA has had an increase in staff over the past few months.

Claire Curtis-Thomas: The DWP has 20 million customers and makes more than 840 million payments a year. I am aware that the Department has established targets to reduce the cost of making those payments. Indeed, it has been successful in converting people to direct debit payments, at a saving of 98p per transaction—down from £1 to 2p. The target was established at 65 per cent. of all payments made. Can my hon. Friend confirm that we have reached that target? Can she also talk about what we might achieve in the future in relation to benefits?

Mr. Speaker: Order. One supplementary question is fine.

Anne McGuire: My hon. Friend is right to suggest that there was an emphasis on trying, for all sorts of very good reasons, to encourage people to go for direct payment. I can confirm that we have not only met but exceeded the 65 per cent. target.

Pension Fund Deficits

Jessica Morden: What assessment he has made of employer initiatives to reduce their pension fund deficits.

Stephen Timms: We welcome moves to reduce scheme deficits, and the new scheme funding requirements reflect our aim that deficits should be reduced. The pensions regulator will work with trustees and employers on realistic plans for eliminating pension fund deficits.

Jessica Morden: As the Minister will know, some major companies have recently made large contributions to their pension funds to reduce their deficits, including HSBC, which contributed £1 billion. What does he intend to do to encourage other companies to follow that example?

Stephen Timms: I welcome the large contributions made by a number of companies recently. My hon. Friend mentions one such company. Others include HBOS, which committed £1.8 billion over five years, Philips, which committed £400 million, and ITV, which committed £325 million. There are a number of other examples as well. The risk-based form of the levy for the pension protection fund means that firms can reduce the amount they pay in levy by reducing their deficits. Her example shows that the new incentives are having the desired effect. Other firms are not in the position to reduce their deficits so quickly. The regulator has acknowledged that some will need significantly longer than the proposed 10-year benchmark. However, I welcome the progress that is being made.

Philip Dunne: Does the Minister recognise that the schemes that the Government have introduced collectively mean that the best way for most companies to reduce their pension exposure is to close the scheme to new entrants? The second best way is to close the scheme altogether.

Stephen Timms: No, I do not agree. We are seeing pressures on defined benefit schemes in the UK, as elsewhere, arising mainly from rising life expectancy and volatility in the stock market, but also from increased transparency in accounting standards. The regulator has made it clear that there will not be a requirement to close deficits within 10 years, but there will be a case-by-case consideration of each scheme.

Lindsay Hoyle: Obviously there is concern about overseas companies that buy British companies and, of course, operate overseas. What can we do about those pension funds? What regulations are in place to ensure that those funds are not taken away from British pensioners?

Stephen Timms: My hon. Friend knows that we changed the arrangements and the regulatory framework for pension schemes in the Pensions Act 2004, and put in place a much more robust set of protections. Experience will show that they will be effective and do the job that is needed.

Nigel Waterson: Has the Minister taken note of the CBI's concerns that one in five UK companies could run out of cash and collapse because of the proposed new funding requirements? We urge him to assess the likely job losses that that would create. Will he impress on the pensions regulator the need for common sense and flexibility in the time scale for funding requirements?

Stephen Timms: Yes, I have seen those concerns. Under the new arrangements, firms and trustees will be required to have a plan for closing the deficit on each scheme. The regulator is proposing to look more closely if those plans are to take more than 10 years. The CBI's concern is that that 10-year threshold could become a rigid requirement. I agree that that must not be allowed to happen. The regulator agrees with that as well.

New Deal

Ian Austin: If he will make a statement on the new deal programmes.

Margaret Hodge: The new deal is one of the most successful policies introduced by this Labour Government. It has helped us eradicate long-term youth unemployment and it has helped us cut long-term unemployment among all people of working age by over 90 per cent. The new deal has already helped more than 1.5 million people into work, including many in my hon. Friend's constituency.

Ian Austin: I thank my right hon. Friend for that answer. Unemployment in Dudley, North is down 38 per cent., and 2,300 people in my constituency have found work as a result of the new deal. That has had a big impact. What plans does she have to strengthen the new deal and ensure that we help those long-term unemployed who are still without the skills that they need to find work? Can she set out her assessment of plans to abolish the new deal, as advocated by some hon. Members?

Margaret Hodge: rose—

Mr. Speaker: Order. Just the first question, Minister.

Margaret Hodge: Unlike any other political party represented in this House, this Government will maintain and extend the new deal to ensure that we can build on our very effective policies. Before the new deal was introduced, the previous Government threw people on to the scrap heap of the dole. We have lifted people out of poverty and into employment very successfully.

David Davies: What has been the total cost of the new deal since it was set up? How many of those people who the Minister says have found jobs did so as a result of the new deal and not as a result of company vacancies?

Margaret Hodge: The hon. Gentleman would benefit from going to his own Jobcentre Plus and discussing with people there—his constituents—how they have been helped and supported by the new deal. If we scrapped the new deal it would cost the public purse much, much more in benefits; it would cost the economy much, much more in lost output and lost productivity; and it would cost individuals much, much more in lost opportunity and lost hope.

Ashok Kumar: The new deal has been very popular in my constituency. [Interruption.] Almost 3,000 youngsters have benefited from this great scheme, and making such a success of it is testimony to the Labour Government's efforts. I am concerned about unemployment among graduates. The Minister mentioned extending the scheme. Has she considered extending it to graduates, who would benefit from it rather than having to stack shelves in supermarkets?

Margaret Hodge: The groans from Conservative Members make me wonder how on earth they believe that they will command support among the whole population for their bigoted prejudice against a scheme that has simply helped more people into work.
	To answer my hon. Friend's question, graduates, as much as any other group of people, are eligible for the new deal. Many of the new jobs that are becoming available as a result of our very effective stewardship of the economy will provide opportunities for people to move from graduation into employment. We will ensure that the new deal is there to support them for as long as we are in government.

David Ruffley: Under the new deal for disabled people, where charitable and voluntary bodies have been allowed to deliver job-placement services, more people have been placed into more jobs more quickly. However, despite the Government's warm words about charitable and voluntary bodies, the National Audit Office said last June:
	"Our research shows they have not seen any general improvement in funding practices since 2002",
	and that, on the part of the Government,
	"this . . . reflects a general suspicion and lack of trust together with a tendency to underrate the voluntary sector's professionalism and ability to deliver public services."
	What specific steps will the Minister take to end that damaging discrimination against charitable and voluntary bodies, which want to do so much more to get people out of dependency and into work?

Margaret Hodge: I certainly will not scrap the new deal. This Johnny-come-lately support for the voluntary sector is a bit odd. [Interruption.] The hon. Gentleman ought to check, without showing me little bits of paper, how much of our expenditure on the new deal goes to the voluntary and community sector. We on the Labour Benches give considerable support to ensuring that the best agency and the best people—whether under the new deals for disabled people, for young people, for 25-plus or for lone parents, and whether from the charitable sector, the private sector or, indeed, the statutory sector—are there to support individuals.

David Kidney: The southern part of my constituency is a pathways to work pilot. Does my right hon. Friend agree that the signs are good that the new deal approach will even benefit people on incapacity benefit who want to get back to work?

Margaret Hodge: I thank my hon. Friend for giving me an opportunity to reiterate that the pathways to work pilot makes considerable use of the voluntary and private sector in providing services for individuals—[Interruption.] No, practically all of it goes to the private and voluntary sector. I suggest that a teach-in would be helpful for the hon. Member for Bury St. Edmunds (Mr. Ruffley). The pathways to work pilots are the most successful intervention attempted by any Government in the developed world in providing hope and opportunity for people with long-term illness and disabilities to return to work. There has been an 8 per cent. increase in the number of people returning to work on that pilot.

Pension Schemes (Regulation)

Alistair Carmichael: What assessment he has made of the likely effects on occupational pensions of planned changes to the regulation of pension schemes.

Stephen Timms: The reforms have been designed to promote good administration of occupational pensions and to protect members' benefits. The pensions regulator has made a good start with a flexible, proactive and risk-based approach to regulation.

Alistair Carmichael: I thank the Minister for his answer, but he will know of the growing concern that changes to the regulatory environment have driven the UK's defined benefit pension schemes to shift into bonds, especially long-dated index-linked bonds, driving their yields down to incredibly low levels. He will also know that that has caused companies to invest less in their own businesses. Does he share my concern that those changes will only increase pension deficits and damage the economy as a whole? Does he believe that there are parallels to be drawn with the catastrophic debt deflation that afflicted Japan in the 1990s?

Stephen Timms: I do not agree with the hon. Gentleman's analysis. The type of investments held by schemes does not have any bearing on the calculation of the Pension Protection Fund levy next year. Long-dated bonds are sought after, but that is because schemes want to match their assets with their liabilities, which is a rather different motivation from the one that he proposed.

Jim Cunningham: Has my hon. Friend had any discussions with the regulator about Federal-Mogul—as he knows, it is a major problem, to say the least—given that a number of people in Coventry could be affected by the outcome?

Stephen Timms: I am aware of that case and, indeed, the very close interest that my hon. Friend takes in it. I pay tribute to him for all the work that he has done. I am keeping an eye on developments, but he will accept that the establishment of the Pension Protection Fund is a reassuring development for members of that scheme.

Financial Assistance Scheme

John Robertson: What recent assessment his Department has made of the funding level of the financial assistance scheme.

Stephen Timms: We have provided £400 million of taxpayer funds over 20 years for the scheme. The likely calls on that funding will be clearer when we have assessed the eligibility of each scheme and its members.

John Robertson: I thank my hon. Friend for his response. My understanding is that 167 schemes have been accepted as qualifying for the payment scheme. However, in those 167 companies only 15 people are receiving any money. Does he agree that that is a disgrace, and what do he and the Department intend to do to ensure that more people receive payment?

Stephen Timms: I very much welcome my hon. Friend's interest in that important subject. He is quite right—so far, 159 schemes have qualified for the financial assistance scheme, but only two have provided data for calculating interim payments, which is why a hold-up has occurred. Schemes should do much better than that, so he will agree that it is vital that other schemes provide that data without delay.

Michael Penning: Through the Minister, may I thank the Secretary of State for meeting a delegation of former Dexion workers from my constituency, 700 of whom have had their pensions stolen? Is there any sign of when they are likely to receive compensation through the financial assistance scheme?

Stephen Timms: I am taking a close interest in that scheme. Indeed, I spoke to the trustees last week, encouraging them to provide the data that is needed quickly. In the first instance, quite a small number of people are entitled to interim payments, but I hope that there will not be too long a delay for everyone else.

Child Support Agency

James Duddridge: If he will make a statement on the recent performance of the Child Support Agency.

Brooks Newmark: If he will make a statement on the performance of the Child Support Agency.

Anne McGuire: As my right hon. Friend the Secretary of State made clear in his reply to the hon. Member for Mid-Worcestershire (Peter Luff), we have acknowledged that the performance of the agency is not good enough. We are looking at ways to improve its performance, so that the right maintenance payments are paid at the right time in a lot more cases. The Secretary of State will make an announcement shortly on how we intend to accomplish this.

James Duddridge: What would the Minister say to people such as my constituent, Mr. Graham Topping, who is paying £415 under the old assessment scheme and under the new assessment scheme will pay £190? Mr. Topping believes that the Department's policy of not transferring from old to new may cost him his home, and he says it is too little, too late.

Anne McGuire: The hon. Gentleman's constituent can ask for an assessment review, and it might be advisable for him to do that. I reiterate the comments made by my right hon. Friend that we appreciate that the agency's performance has not been good enough. He will shortly make a statement to the House.

Brooks Newmark: The Prime Minister has commented on the problems that have been encountered because the CSA is the investigating agency, then it is the adjudicating agency, and finally it is the enforcement agency. Will the Minister renew the Government's commitment to a full separation of powers?

Anne McGuire: The Secretary of State will shortly make a statement to the House about the way forward for the Child Support Agency.

Keith Vaz: I appreciate that the Government are trying to do something about the problem, but will my hon. Friend look into the length of time it takes for the CSA's chief executive to respond to hon. Members when we raise issues of concern? In many cases what is required is a clear and transparent answer giving information to our constituents, so that they do not have to follow up the inquiry with telephone calls. Such courtesy and efficiency goes to the heart of the way in which we can improve the system.

Anne McGuire: I apologise to my hon. Friend if he has not received the sort of response that he would expect from the chief executive of a DWP agency. I will look into the matters that he raised.

Michael Weir: Is the Minister aware that one of the complaints of those who are involved with the Child Support Agency is that while they are trying to deal with people who are ducking and diving, when they report cases to the court for prosecution the court does not take those cases seriously and many are not proceeded with? When Ministers are considering the new CSA, will they talk to those in charge of the court system to see if anything can be done about that?

Anne McGuire: The hon. Gentleman, in some respects, highlights an issue that we all recognise as vital—the enforcement of payments. When my right hon. Friend the Secretary of State delivers his statement to the House shortly, I am sure that he will cover some of the issues that the hon. Gentleman raised about the court system and its interaction with the CSA.

Pensions Commission Report

Mark Harper: What recent representations he has received regarding the findings and recommendations of the Pensions Commission report.

Stephen Timms: We have received numerous representations and are looking forward to many more in the course of the national pensions debate. We aim to respond to the commission with a White Paper in the spring.

Mark Harper: The equalisation of the state pension age for women to 65 will save the taxpayer about £10 billion. Can the Minister give an undertaking that that saving will be available to help pay the cost of Lord Turner's recommendations?

Stephen Timms: That saving is being treated in precisely the same way as it was treated when the Government whom the hon. Gentleman supported before 1997 made that change. The plans for future spending are built into the projections now, precisely as they were when the right hon. Member for St. Albans, now the right hon. Member for Hitchin and Harpenden (Mr. Lilley), was Secretary of State.

Seasonal Workers

Mark Simmonds: If he will make a statement on how jobseeker's allowance is applied to seasonal workers.

James Plaskitt: The arrangements are set out in the Jobseekers Act 1995. Entitlement to jobseeker's allowance depends on the nature of the employment arrangements and whether it is reasonable to assume that there is a continuing pattern of re-employment. For seasonal workers, where the average hours worked over the cycle is 16 or more, the claimant is not entitled to JSA.

Mark Simmonds: The Minister will be aware of the immense problems caused, particularly in Skegness, by the unannounced recent implementation of regulation 91, which relates to the jobseeker's allowance. That is causing significant hardship to seasonal workers, all of whom anticipated being able to claim benefit in the winter months, as they have done in previous years. That change in Government policy has led to people being evicted from their homes, people having to pawn their possessions, and people fainting through hunger in the Skegness benefits office. This matter requires the Minister's urgent attention. Will he assure me and my suffering constituents that he and his civil servants will look into it with the utmost urgency?

James Plaskitt: I have looked into the particular circumstances. In Lincolnshire, the remunerative work rules for seasonal workers were incorrectly applied prior to June 2005. I can assure the hon. Gentleman that there has been no policy change. The problem has been in deciding a condition of entitlement—namely, whether the customers in question are in remunerative work. Decision makers are now applying the legislation correctly. I can assure the hon. Gentleman that no action has been taken against customers who received JSA when the rules for seasonal workers were applied incorrectly and that no one has been asked to repay any benefit paid.

Henry Bellingham: Is the Minister aware that seasonal workers in my constituency who work at the sugar beet factory at Wissington, in the fishing industry, or in food processing, and who have tried to find jobs out of season but have been unable to do so, have in the past always been able to claim benefit? They are most concerned about the fact that they have had no warning whatsoever and have therefore been unable to plan their lives and make other arrangements. What does the Minister say to those constituents of mine, who are in a real dilemma?

James Plaskitt: There has been no change. The rules were set down in clause 1(2)(e) of the 1995 Act, if the hon. Gentleman would like to take a look. The rules laid down for seasonal work are clear. The Act states that where there is a cycle of work consisting of one year or more that qualifies as seasonal work, and if the weekly average of hours worked over the cycle is 16 or more, there is no entitlement to JSA. Those have been the rules since 1995, and those are the rules still enacted.
	It is worth pointing out that the benefits system is not intended to subsidise employers, who expect their seasonal workers to return but are not offering any retainer in the meantime. Seasonal workers need to accept that they might need to look for other work at other times of the year.

Mr. Speaker: I call Richard Ottaway—not here. May I put on the record that it is a discourtesy to the House when hon. Members put down questions but do not turn up?

Jobcentre Plus

Joan Walley: If he will make a statement on the roll-out of Jobcentre Plus in north Staffordshire.

Margaret Hodge: I commend my hon. Friend on the close interest that she has taken in this issue. Under our reorganisation in north Staffordshire, there will be four local service outlets providing the full range of face-to-face Jobcentre Plus services. The Jobcentre Plus offices in Kidsgrove, Longton and Newcastle are due to open later this year, and the new purpose-built Jobcentre Plus building in Hanley is due to open in July 2007.

Joan Walley: I thank my right hon. Friend for all that the Government are doing to help those who can work to find work, to stay in work, and to retrain for work. She will be aware, however, that I have had Adjournment debates in this House about the closure of the Burslem jobcentre. Will she meet me to see what she can do to ensure that people in Burslem are not left out under the new arrangements? Does she agree that we need to tackle this in a joined-up way, and that we have a particular problem with the removal of funding from the learner support fund, which comes from the Department for Education and Skills? Will she meet me to ensure that we can provide the adequate services that we need in Burslem?

Margaret Hodge: I am aware of the many questions and debates that my hon. Friend has pursued in this House in the interests of her constituents and of her concern about the Burslem Jobcentre Plus office. On our calculations, the longest journey time for anybody to get to an alternative office is 20 minutes, and the cost is £2. My hon. Friend is shaking her head. It would therefore be wise if we were both to meet to discuss the matter further. I share her concern about our joined-up working with the Department for Education and Skills to ensure that we provide opportunities for individuals.

Charles Walker: Waltham Cross, in my constituency, has an excellent jobcentre. What measures is the Minister taking to ensure that my local jobcentre works closely not only with local employers but local recruitment companies, so that a wide range and diversity of jobs are available to the local work force?

Margaret Hodge: I am delighted that the hon. Gentleman appreciates the very good service given by Jobcentre Plus in providing, through the new deal, opportunities for work for many of his constituents. I agree that bringing employers into our arrangements is utterly crucial. The way to maintain the very high employment rates we enjoy in this country is for employers' needs to be matched to individuals and their skills, with the state providing the support necessary to prepare the individual for the job.

Unemployment Claimant Count

Andrew Selous: If he will make a statement on the claimant count for unemployment.

Margaret Hodge: Although recent figures on claimant unemployment have been erratic and there have been increases, the level still remains close to historically low levels. Furthermore, rises in the claimant count have, over the past year, been partially offset by a reduction in those claiming inactivity benefits.
	Jobcentre Plus will continue to ensure that all jobseekers fulfil their responsibilities to seek and be available for work, are offered the assistance they need to find work, and receive the benefits to which they are entitled.

Andrew Selous: The Minister will know that January's labour market statistics show an increase in the claimant count for the 11th month in a row. Growth in earnings is also falling—that is something that I have noted in my constituency, as well. Will she tell the House how she plans to tackle that rise in the claimant count?

Margaret Hodge: It is indeed right that the last set of employment figures was disappointing. However, I say to the hon. Gentleman that over the year we have still seen an increase of more than 200,000 in available employment opportunities. I shall continue to keep a very close eye on the figures to see whether what have been erratic figures turn into a trend. Through Jobcentre Plus, we shall redouble our efforts to ensure that all those who find themselves on the claimant count are given the appropriate support to bring them swiftly back into work.

Pathways to Work Pilots

Adam Afriyie: When he plans to publish a full cost-benefit analysis of the pathways to work pilots.

Margaret Hodge: We intend to publish a cost-benefit analysis of pathways next year. That analysis will be based on both new and repeat customers in the first seven pathways areas. Early results show off-flows from incapacity benefit at six months of about 48 per cent. in the pilot areas, compared with about 40 per cent. nationally, demonstrating an improvement of eight percentage points. That means that the reduction in the incapacity benefit case load more than pays for the additional costs of the pilots.

Adam Afriyie: Of course, we welcome any good news from the pathways to work pilot. However, it strikes me that a pilot project is exactly that: one is testing whether the project will work. Given that the full results have not been published, it could well be that jobs created through the voluntary and independent sectors are created more quickly and cheaply than through pathways to work. How is it that the Secretary of State has announced another £360 million for pathways to work when the results are not in?

Margaret Hodge: If I may say so, I am slightly puzzled by that question. Conservative Front Benchers welcome the fact that we intend to extend the pathways pilots to a national programme by 2008. The hon. Gentleman also knows that most of the services in the existing pilots are provided through the voluntary and private sectors. If the hon. Gentleman has read our Green Paper, he will know of our intent to roll out further pathways projects across the country, with the private and voluntary sectors being in the lead in the majority of those services.

Post Office Card Account

Lindsay Hoyle: If he will make a statement on the decision not to renew the contract with the Royal Mail for the Post Office card account.

James Plaskitt: Government funding for the Post Office card account will end in March 2010, as was always planned. All existing card account customers will still be able to use the Post Office to collect their benefit or pension, if they wish, by using a bank account there. Some 25 different bank accounts can be accessed at Post Office branches now, and we hope that there will be more in future. We aim to develop a joint strategy with the Post Office to move customers from the card account to other accounts with Post Office availability.

Lindsay Hoyle: I hear the Minister's view, but mine is slightly different. I do not recall that the account was to be temporary. We were told there was a 10-year contract that could be rolled over beyond that. That was the emphasis given when the account began. Will the Minister reconsider his position? Pensioners throughout the country depend heavily on the post office to access their money. Please do not put them at risk. Please reconsider. The whole House will agree that it is important that pensioners have easy access to their money.

James Plaskitt: That certainly is important. We have given an undertaking, which I am happy to give again now, that any pensioner who wishes to collect their pension from a post office in future will be able to do so. The same goes for any recipient of in-work benefits. However, the Post Office card account contract was run until 2010, and it was stated explicitly in that contract that the arrangement was a transitional one. As I said, 25 other bank accounts are currently accessible across a post office counter, and by the time the contract runs out in 2010 there are likely to be more. In the meantime, we will assist any pensioner or other benefit recipient who wants to make a transfer from card account to those accounts. There is no reason why anyone should be forced into a situation in which they can no longer collect their pension or benefit from the post office, if that is what they wish.

London Demonstration (Policing)

David Winnick: To ask the Secretary of State for the Home Department if he will make a statement on the policing of the London demonstration on 3 February.

Charles Clarke: I am happy to make the statement requested by my hon. Friend. I am pleased that the response in Britain to publication of the Danish cartoons has, in general, been respectful and restrained. That is in the best traditions of British tolerance, and I hope and expect that it will continue.
	Decisions on the arrest and prosecution of any participant in demonstrations, including those last Friday and over the past few days, are properly matters for the police and prosecuting authorities, who are undertaking rigorous assessments of the appropriate way to proceed in individual cases. If the police conclude that there have been breaches of the law and decide to take any action, we shall, of course, support them. The House will understand that I am not in a position to give any further details at this stage.
	The Government stand in full solidarity with the Danish Government in resisting violence. We believe that they have done everything possible to handle a difficult situation. Nothing can justify the violence aimed at European embassies or at Denmark. We understand the offence caused by the cartoons depicting the Prophet, but freedom of expression must be exercised with respect for the views of others, including their religious beliefs. Such attacks on the citizens of Denmark and the people of other European countries are completely unacceptable.

David Winnick: I agree with my right hon. Friend. I am against the cartoons, but is it not entirely unacceptable for a bunch of hooligans and thugs in London to demand that people be beheaded and to glorify the atrocities of 7 July and call for further such atrocities to be committed in Britain? Is that not a clear case of incitement to murder? Indeed, it is a deep insult to those who lost their loved ones in the July atrocities and to theothers who survived, but who will suffer the consequences of their serious injuries for the rest of their lives.
	Have not mainstream Muslim organisations made itperfectly clear that those hooligans are not representative of members of the Muslim faith and that they dissociate themselves from them? They have made it clear, as I do, and as I hope most people do, that legal action should be taken. Should not a message go out from the House that we should never again on British soil see the kind of slogans and incitement to murder that disgraced this country last Friday?

Charles Clarke: I very much agree with my hon. Friend's remarks. The actions that he described were unacceptable. Decisions on arrest and prosecution are properly matters for the police and prosecuting authorities, and that is the way it should be.
	I join my hon. Friend in paying tribute to the way in which the many organisations within the Muslim communities have condemned this action in the strongest and most explicit terms. That is in part what I described earlier as the best tradition of British tolerance. I hope that that will continue.
	The incident illustrates the merits of having all the necessary legislation on the statute book, which includes the offences created by the Terrorism Bill, including the proposed new offences of encouragement and glorification of terrorism, which I hope will now have the support of the whole House.

David Davis: May I start by saying that I did not much like the decision of various European newspapers to publish cartoons that are seen as offensive by Muslims. However, like many things of which I disapprove, it is not illegal, nor should it be. It would be entirely proper for those offended by the cartoons to mount a peaceful demonstration against their publication. The right to demonstrate is an extremely important part of the rights of British citizens. It is, however, a right with clear limits. That does not include a right to incite violence, which is outside the law.
	Let us be clear: placards carrying slogans calling for people who insult Islam to be beheaded, massacred or annihilated are direct incitements to violence. It is less than a year since the terrorist atrocities last July at King's Cross.
	Unlike the press, I do not criticise the police for not making immediate arrests at the demonstration. Public order decisions are difficult and should not be second-guessed on a minute-by-minute basis. However, I expect that action should be taken, and taken soon, against those who clearly incited violence. It is vital that we make it clear that incitement to violence has no place in our political life.
	I am by no means the only one who believes that. Inayat Bunglawala, the spokesman for the Muslim Council of Britain, said:
	"The placards were quite disgraceful and seemed to constitute a clear incitement to violence, even murder."
	He added that
	"Most Muslims will feel enormous distress and anguish at what has occurred. There will be no sympathy for the extremists when they are charged by the police."
	I was glad to hear the Home Secretary agree that our laws, both common and statute, before any recent changes, provide a range of offences that appeared to be either committed or infringed at the demonstration on Friday. If action is not taken, there will be a number of consequences, all of them bad. First, the perpetrators of these outrages will see that we are willing to tolerate anything, and as a result the next demonstration will be even more outrageous.
	Secondly, especially after the prosecution and conviction of Maya Evans, the lady who held a memorial ceremony at the Cenotaph, many people will conclude that the law is inconsistent and unjust if real offenders against public order go free and unchallenged.
	Thirdly, it will be difficult for moderate Muslim leaders to give a clear lead to their community if the Government refuse to give a clear lead.
	I welcome the Home Secretary's announcement that an investigation or assessment of last Friday's events will take place. The right hon. Gentleman has properly been unwilling to be drawn into questions of individual prosecutions. I understand that, but I reiterate that the stance taken by the Director of Public Prosecutions has serious public policy implications for both community relations and public safety in this country. The right hon. Gentleman should be sure that he is made aware of that. As I have said before to him, I do not envy the difficult balance that he has to strike in this area. For all the decades that we have known each other it has been conventional wisdom and, I think, our shared view that the route to good community relations is a mix of generosity, tolerance and respect. It has been clear in the past few days that the two most generous and tolerant nations in the world, looking only at Europe, are Holland and Denmark, yet they are both in different ways going through agonies with community relations. Does the right hon. Gentleman agree that we must continue our traditions of generosity, tolerance and respect while drawing a line about what is acceptable civilised behaviour, given that that line was emphatically crossed at the demonstration last Friday?

Charles Clarke: I am glad that the right hon. Gentleman has decided not to join the criticism of the police that some parts of the media have made. There have been many occasions, including May day and football protests, when arrests have been made not immediately but subsequently. As I said, the police and prosecuting authorities are entirely right to examine the evidence in detail before deciding how best to proceed. Of course, I accept what he says about the importance of the implications of decisions taken on the matter. I assure him and the House that I am keeping in close contact with the situation.
	The right hon. Gentleman is right to pay attention to the question of incitement to violence—and also, I would say, incitement to hatred. Freedom of speech has conventionally been proscribed in such areas for good reason, and that is why it is important to illustrate the merit of having the necessary legislation on the statute book, including the Terrorism Bill and its proposed new offence of the encouragement and glorification of terrorism. I draw hon. Members' attention to the fact that the Bill returns to the House on 15 February. Given the public position that the right hon. Gentleman has taken, I hope that Conservative Members will think long and hard about whether they need to revise their attitude to the offences in the Bill and support the Government's aim of getting it on to the statute book as quickly as possible.
	More generally, it is important to reinforce the right hon. Gentleman's remarks about the need to build a tolerant society and to stand firmly and strongly against incitement to violence and hatred, so I hope that the whole House will do just that.

John Denham: I welcome what my right hon. Friend and others said about the need to prosecute clear breaches of the law. Does he agree that the whole sorry episode illustrates the deep and worrying confusion in our society about the boundaries of what causes offence, the ways in which free speech needs to be responsibly exercised, and the ways in which different cultures can have very different takes on apparently similar issues? Does he accept that we need the Government to take the lead on issues of integration so that everyone in this country understands the common rules of engagement and civic behaviour? This is not simply a policing matter, and most of the issues will be dealt with in other ways.

Charles Clarke: I very much agree with my right hon. Friend, especially on the question of addressing integration in the way he suggests. I say again—it is important to be clear about this—that this country realises not only that freedom of speech and expression are absolutely essential to our national life, but that judgment, taste, courtesy, circumstance and respect means that there is no obligation to say or do something that gratuitously offends or provokes simply because there is a right to do so. One of the strengths of our society is the fact that most people, in general, weigh up the consequences of what they do before they act. However, beyond those matters, the House has consistently acknowledged that, in certain circumstances, it is appropriate to place legal restrictions on absolute freedom of expression. That is the case for incitement to violence, as has been said, and for certain aspects of incitement to hatred. I think that it is also the case for the incitement or glorification of terrorism. Those circumstances are the bounds beyond which absolute freedom of speech cannot be expressed. Parliament must address those matters, so my right hon. Friend's suggestions are helpful.

Alistair Carmichael: I accept what the Home Secretary says about the operational nature of many decisions taken about Friday's demonstration, but does he accept that the House deserves to be told, in the fullness of time, the reasons for those decisions and the level at which they were taken? Were they taken as a result of a policy decision, or taken at ground level by the senior officer in charge of policing the demonstration? Will the Home Secretary undertake to inform the House of those matters at the earliest available opportunity?
	It is accepted that many of those who were quick to criticise the police for making no arrests at the weekend would doubtless have been even to quicker to criticise if arrests had been made that inflamed a highly volatile situation. Does the Home Secretary accept that it is essential that there is a full inquiry and that prosecutions follow, provided there is sufficient evidence to justify them and that the CPS and, perhaps, the Attorney-General feel that that is in the public interest?
	Finally, do not these events illustrate the wisdom of the position taken by this House last week on the Racial and Religious Hatred Bill? The decision by these newspapers to publish the cartoons was almost certainly unwise, but it should never have been made illegal.

Charles Clarke: On the final point, the decision whether to publish the cartoons would not, in my view, have been affected by the Bill. The issue to which the hon. Gentleman refers is one of blasphemy, not of incitement to hatred, which is addressed in that Bill.
	I am certainly ready to give the fullest information I can to the House, and I will operate on that basis.

Ashok Kumar: Does my right hon. Friend agree that some Muslim extremists are poisoning the atmosphere in this country, in what has been a great multicultural society? There has been a great achievement by the Asian community, with Hindus, Sikhs and Muslims working with the rest of the community. What these extremists are doing is destroying the fundamental fabric of what has been achieved. Will the Home Secretary call in moderate Muslims and ask them to demonstrate publicly in the same spirit as those other people were demonstrating, to show that they have nothing to do with what those people were doing on Friday? The grotesque, inflammatory language that they used was not part and parcel of this society.

Charles Clarke: I agree. Perhaps I should reinforce the point that I made earlier: the leadership of all parts of the Muslim community has expressed exactly the sentiments set out by my hon. Friend. I do not need to call in the leaders of the Muslim community to make that point because they have been doing so, and I am confident that they will continue to do so very strongly.
	Perhaps I can make one other point in response to the question. My hon. Friend is right to identify the fact that there are forces in this country, including within the Muslim community, who seek to weaken and damage the democratic fabric of our society. That is why the Terrorism Bill that is now before Parliament contains proposals on proscription of certain organisations that set out to do that. We are widening the criteria for proscription precisely to address the point that my hon. Friend makes, and I hope that those considerations, too, will have the support of the House when we come to look at the Terrorism Bill in the round.

Iain Duncan Smith: The behaviour of the police in the next few weeks will help us to define whether our tolerance has slipped to become licence for a small minority, and we will watch very carefully to see how they proceed.
	Has the Home Secretary had any conversations with his colleagues in the Foreign Office? It is absolutely clear from all events that the behaviour of some middle eastern Governments in fomenting, stirring up and creating even worse elements of hatred over the last three or four days should be approached and dealt with publicly. After all, those Governments have been the sponsors of some of the worst cartoons, showing Israelis in absolutely the worst light, with Jewish flags flying from concentration camp photographs. That was quite outrageous, but nothing was ever done. Will the Home Secretary please now urge his colleagues to make very strong representations, and public ones at that?

Charles Clarke: It is for that reason that I made remarks in my initial statement supporting the Danish Government against the attacks that they are experiencing from a number of countries. Yes, I have talked about the matter with colleagues in the Foreign Office, and yes, I can give the House the assurance that strong representations are being made in the direction to which the right hon. Gentleman referred.

Diane Abbott: Does the Home Secretary agree that if sections of the Muslim community had sought to demonstrate peacefully against the war in Iraq or what I believe to be the excesses of the so-called war on terror, some of us in the House would have supported them, and the entire House would accept that they had an absolute right to do it? But to stage a demonstration that is a clear incitement to violence in an attempt to impose censorship on others is quite a different thing. Difficult as it may be, the test of a society's commitment to freedom of speech, which I think is particularly important in the multicultural society that we have today, is not just our willingness to defend people who say things that we agree with, but our willingness to defend those who say things with which we profoundly disagree.

Charles Clarke: I agree with that statement. That is an important aspect of everything that we have said on these matters. But I say again that incitement to violence, to hatred and to terrorism is, in my opinion, a step beyond the absolute freedom of speech and needs legislation if it is to be addressed properly.

Roger Gale: In the past, the Home Office has extolled the virtues of the stop forms that now have to be completed when officers stop people in the street. On Friday, however, on the one recent occasion when the information collated from such forms might just have been of value, it would appear that they were not being issued. Why? If the answer is that it would have been unsafe to do so, will the Home Secretary now consider abandoning them?

Charles Clarke: As I said earlier, these are operational matters for the police to consider, and that was the judgment that they made. I will look at the matter in the round when the whole situation is analysed, but it would be a mistake for any Home Secretary to cut across the operational decisions made by the police in these circumstances.

Jeremy Corbyn: Does the Home Secretary accept that, in the multi-faith, multicultural society of modern Britain, we should obviously condemn the ludicrous and obscene language that was used last week? Does he also accept that we should ask those with power in the media and elsewhere not to turn this into a condemnation of Islam as a whole, thus further damaging community relations in this country? Should they not instead extol the virtues of a free society in which everyone is free to practise whatever religion they choose?

Charles Clarke: I agree with my hon. Friend. However, I shall now say something that is very rare for me: a word of defence for the media in these circumstances. Their coverage of these matters has generally not been a critique of Islam or the Muslim world as a whole. In fact, even some of the most vociferous newspapers have quoted prominently the position of Muslim leaders who oppose these actions. I agree with my hon. Friend, but I am not sure that the media have gone out of line with his views on this occasion.

Julian Lewis: Is it not significant that the very people who were behaving in the way that has so outraged the House are also the very people who would have supported the original atrocities that led to the ill-considered cartoons in the first place? Is not the one good thing to come out of all this the fact that the leaders of the moderate Muslim majority have passed with flying colours the test that so many people set when they asked them to come out and condemn the extremists? Let us hope that they will continue to do that.

Charles Clarke: I am not going to make judgments about what the individuals at those demonstrations would or would not have done on any particular occasion. I have never doubted—and I do not think that most hon. Members have doubted—that the leadership of the Muslim community across the whole country would deplore acts of this kind, and that they would come out and state that. That is indeed what they have done.

Dennis Skinner: The Home Secretary keeps referring to the fact that the police have certain duties and that he has certain duties, and that ne'er the twain shall meet. Why is there one set of rules for those who engage in a holy war, while there is quite another for those who engage in a class war, such as the miners' strike of 1984–85? That highly volatile situation lasted for a whole year and 7,000 miners were arrested, some only for shouting, "Scab!" Why do the police have one set of rules for them, and another set for others? During that period, not one Tory Minister condemned the police for their actions.

Charles Clarke: I hope that policing has moved on since those days, when, as I know my hon. Friend recalls, a Conservative Government were in place. It is important to emphasise that my hon. Friend is right to say that it is appropriate for policing decisions to be taken on policing grounds, and for politics to be done on political grounds. The question of what happened during the miners' strike remains a matter of debate.

James Clappison: Does the Home Secretary agree that the restraint and objectivity that the media have shown in dealing with the publication of the cartoons, and with the events that have followed, have greatly assisted the police in their tasks over the past few days? Would it not be a good idea if that restraint continued? Does not this also show that the British media are not institutionally racist?

Charles Clarke: I agree with the hon. Gentleman about the British media in this case, which is why I said "the response in Britain to publication of the Danish cartoons has, in general, been respectful and restrained". I think that that is correct. I also said, and meant, "I hope and expect that it will continue."

Chris Bryant: Did not this weekend's events show not so much the real face of Islam but a hideous distortion of Islam, effectively undermined by the fundamentalism that can affect any religion in the world and is not by any means the sole prerogative of Islam? Does my right hon. Friend accept that Sir Iqbal Sacranie had every right to say whatever he wanted about homosexuality on the "Today" programme, without the police having to visit him afterwards? Does he think that we need to ensure that people understand fully, and the police understand fully, their responsibilities as well as people's rights in regard to freedom of expression?

Charles Clarke: I do agree that in this flurry of different and difficult circumstances, the more clarity can be provided about how freedom of speech is operated in particular circumstances the better, and I am considering how better to achieve that.

Douglas Hogg: The conduct of most, of many, of the demonstrators was pretty atrocious, but should we not be very careful about invoking criminal law? After all, most of the relevant offences, particularly incitement, require specific intent. That is different in kind from hot-headed and unpleasant rhetoric. The truth is, surely, that in a democracy we have to put up with a great deal that we dislike and of which we disapprove, and in general we should not invoke the criminal law. Failed prosecutions, after all, tend to be extremely counter-productive.

Charles Clarke: It is because I agree with the right hon. and learned Gentleman that we must be very careful when dealing with the criminal law in these areas that I believe the best people to make those judgments are the police and the prosecuting authorities.

Tony Baldry: Does the Secretary of State agree that if we are to build a just and tolerant society we must also have a better understanding of the hurt that was caused in the Islamic world by the original cartoons? Had that incident not already shown, before the demonstration took place, that we should all recognise the need to engage in a much better and deeper dialogue with the world of Islam? Do not all of us, as Members of Parliament, have a responsibility to work out how we can better understand the world of Islam if we are to live peacefully in the 21st century?

Charles Clarke: I agree, which is why I supported what was said by my right hon. Friend the Member for Southampton, Itchen (Mr. Denham), the Chairman of the Home Affairs Committee. He said that we should view integration in that way. As a matter of fact, I think that various discussions that were held within the Muslim world and community after 7 July have been beneficial in achieving some of those understandings and addressing some of the issues, and I hope that that will continue.

John Redwood: I want to praise the police for the way in which they handled the demonstration on the day. It is very good that they did not take action that would have provoked violent or criminal damage. However, I think that many of my constituents and others will want a reassurance, which I hope the Home Secretary can give, that the police were at the same time collecting names, addresses and evidence in relation to the small minority in the demonstration whose behaviour clearly went well beyond the normal conduct of peaceful demonstrations. Can the right hon. Gentleman give that reassurance?

Charles Clarke: I can say that the police have indeed been collecting evidence and information. That is the basis on which they will make the decisions to which I referred earlier.

Coroners System (Reform)

Harriet Harman: With permission, I shall make a statement on reform of the coroner service.
	The coroners system is of great importance. When someone dies a violent or sudden death, when the cause of death is not certain or when the identity of a body is not known, there must, in the public interest, be a proper inquiry, and the bereaved relatives need to know what happened and why.
	Coroners, and the officers who support them, deal with cases that are always sad and often tragic. That was exemplified most recently in the work of the three coroners and their staff who dealt so sensitively and expeditiously with co-ordination of the identification process in the tragic aftermath of the 7 July London bombings. I pay tribute to coroners and their staff, and acknowledge the difficult and important work that they do.
	The service contains many coroners and staff who are dedicated and committed, but I think we all believe that the system within which they do their work could be much, much better.
	There has been long-standing interest in and concern about the coroner service in this House, because all Members have constituents who involved them in cases that ended up in the coroner's court. I am sure that we all want a coroner service that enables committed coroners and their officers to ensure that the public interest is served in all inquests in every part of the country, and which enables bereaved relatives to have their answers; that is not the case at the moment.
	Under the current coroner service, families frequently get overlooked during the inquest process. There is nowhere for them to turn when they think that something is going wrong; there is no complaints system. The system is fragmented, with no national leadership, and it is not accountable. We have no overview of the system as a whole, or of individual cases. Moreover, the system is not properly accountable to this House, which it should be. Standards are not uniformly good; everything rests too much on the personal qualities and abilities of individuals within the system. The legal framework is downright archaic. For most coroners, this is not even their principal occupation; it is a secondary one, added on to their main work as solicitors in private practice. Most coroner's officers have to learn on the job as they handle the most technically complex and personally difficult cases, with no systematic training. That is not fair on relatives or on the coroner's officers themselves.
	The coroner service must serve the public interest and meet bereaved families' concerns in a way that, frankly, it currently does not. That is what these proposals aim to achieve and through them, we will do three things. First, we will put a proper focus on bereaved families and give them a clear legal standing in the system. We will set out the way in which the system should deal with families. We will give them the right to ask the coroner for a second opinion on a death, and to challenge coroners' rulings on how the investigation and inquest is run, and we will establish a complaints system.
	Secondly, we will strengthen coroners' work. There will be a proper system for appointing coroners, and all will have to be legally qualified. Moreover, the role of coroner will have to be their only job. They will have a clear power to investigate a death, even where a certificate has been issued, and they will have additional powers to obtain evidence for their investigations. Dedicated medical advice will be available to them, and there will be an end to archaic boundary restrictions, which cause unnecessary difficulties when major incidents occur or when specialised examinations need carrying out.
	Thirdly, we will establish a national framework for coroners' work. For the first time, there will be a chief coroner, who will give leadership to coroners in the same way as the Lord Chief Justice does to judges. There will be a coronial advisory council, a system of inspection and a national training system for coroners and their officers.
	The question of a second certification of a death was a key issue in the third report of Dame Janet Smith into the Shipman murders. The Government have continued to examine the proposal that every death in England and Wales—some 500,000 a year—should have additional medical scrutiny by the coroner service. The coroner reforms that I am announcing to the House today do not stand alone. They will be complemented by further work being taken forward in the Department of Health, which is aimed at improving patient safety and promoting quality in the NHS.
	We need a system that can identify and investigate suspicious deaths, but which allows families to proceed quickly with funeral arrangements where there is no cause for concern. We are not sure that the proposal to have all deaths referred to coroners achieves that, but we will continue to look at this issue and we are not ruling out the possibility of further reform.
	I should like to thank both Dame Janet Smith and Tom Luce for their work, and to thank the voluntary organisations that have advised me from the viewpoint of bereaved families. I have placed a background note in the House of Commons Vote Office and in the Libraries of both Houses. It gives more detail on the measures that I have announced today and it shows how we have built on the work of Dame Janet and Mr. Luce. We intend to proceed by way of a draft coroners Bill this spring to enable pre-legislative scrutiny, probably by the Constitutional Affairs Select Committee. In parallel with such scrutiny, I intend to arrange a separate strand of pre-legislative scrutiny that will greatly help to inform the House. This will consist of pre-legislative scrutiny by families who have recent experience of the coroner service. I commend these proposals to the House.

Jonathan Djanogly: Coroners' courts are, as the Minister said, undoubtedly a very important issue. In the context of Harold Shipman, the Hatfield rail crash and the more recent example, which she mentioned, of the July bombings, effective coroners' courts and the investigation of death are highly sensitive issues. Alongside the registration of deaths, coroners' courts should provide a reliable system for collecting data on deaths and monitoring trends in deaths. They should provide appropriate investigation into suspicious deaths in order to uncover wrongdoing and offer a thorough and sensitive service for relatives of those who die suddenly and unexpectedly.
	However, they also need to provide for large cases, in relation to which capacity has been an issue. Will the Minister explain how the proposed system would have helped the investigation of the deaths of Harold Shipman's patients and those who suffered in Hatfield, the types of inquest where picking up patterns of behaviour is needed and capacity has been a problem?
	Reform of the coroner and death certification service has been under consideration for some time and it is about time that an effective system was put in place by the Government. The Luce report concluded that the system was not fit for purpose in modern society. The Government's position paper, published in March 2004 following the review by Tom Luce and the Shipman inquiry in the summer of 2003, has left us waiting for some form of Government action for nearly two years. The Government have acknowledged the need to avoid long delays to inquests into deaths in custody and the need for reform in general. Although today's statement is welcome, what, may I ask, has been happening all this time when the Government have been saying for years that legislation is on its way, if not imminent?
	I make no judgment, as the Minister did not, on the 120 or so coroners, their support staff and investigators. I would point out, however, that the statutory powers and procedures under which they work were established in a different era. The Shipman inquiry described a situation in which coroners work from home, where there is virtually no training, and any training that is available is not compulsory.
	The Government's position paper published in March last year made some good recommendations, which were reflected in the Minister's statement; a system based on full-time coroners with legal qualifications, closely supported by appropriate medical expertise, together with tighter rules for death certification, notification of all deaths to coroners and stronger support for scrutinising cases and investigation where necessary. However, will the proposed new system allow for judges to sit as coroners when required, as recommended by the Hatfield inquest?
	Dealing with death will always be, and should always be, a sensitive issue that requires and deserves efficiency, speed of process and accuracy. The reform of the coroner's court system to deliver those objectives is long outstanding. To that extent, the Government's proposals are generally welcome, although there is a clear need for careful review of the proposals, which are light on detail so far. We welcome the Government's offer and suggestion of pre-legislative scrutiny. Will that take place in the spring? I think that is what the Minister implied.
	Finally, I note that parallel scrutiny is proposed by families who are experienced in the process. That is welcome, but will it take place before parliamentary scrutiny so that the House can have the benefit of its findings?

Harriet Harman: I thank the hon. Gentleman for his response and I agree with much of what he said. I agree with his critique of the system and we share the view that he put forward. I also agree that it has taken too long for us to reform the coroners system. Indeed, when I was legal officer at the National Council for Civil Liberties, working alongside its general secretary—now my right hon. Friend the Secretary of State for Health—we argued that these changes should happen, and that was some 30 years ago. Of course, as people will be well aware, the Broderick report of the 1970s has yet to be implemented. We have a system that still looks pretty much as it did in the 18th century.
	I can assure the hon. Gentleman that instructions have gone to parliamentary counsel. The Bill is just about drafted and it will be with the House in draft form in April to May. We expect to have the Bill proper in November or December, so that we will have enough time for parliamentary scrutiny. We shall actually get on with it this time; it is long overdue.
	Secondly, the hon. Gentleman made a point about capacity, which is very important. We want a local system of coroners because most inquests can be dealt with best at local level by qualified legal coroners who are professionally supported. However, there will be some cases where that is not the right approach. Instead of making relatives and everybody involved go through a local coroner first before, inevitably, ending up in the High Court, we envisage a situation in which coroners themselves can say, "I would like a High Court judge to take this case in the first instance", or the chief coroner can say, "I shall take the case in the first instance" or "I shall appoint a High Court judge to take the case in the first instance", or the relatives can say, "We think this will end up in the High Court so why don't we start with a High Court judge?"
	Thirdly, the hon. Gentleman asked about investigation. As well as the 200,000-plus families involved in the coroners system every year, we have special thoughts about how to be absolutely sure that we avoid the situation that befell so many of Harold Shipman's patients. That is about investigation. People are well aware that if a doctor recommends a serious operation or radical treatment, it is not a hostile act against the doctor to ask for a second opinion; it is normal. But there has been no possibility for people to challenge a death certificate without the implicit accusation that the GP has been responsible for murder or malpractice. It is important that there is a light-touch ability so that relatives can say, "Can we have a second look at that?" That will be an important contributor towards ensuring that we do not have situations where people have concerns but there is no way in which they can call in a coroner to take a second look at the case.
	The Lord Chancellor is strongly concerned that we get a move on and reform the system. It is well overdue for modernisation, which is what our proposals will achieve.

Chris McCafferty: Thank you, Mr. Speaker, for giving me the opportunity to speak on behalf of my constituents and also those of the Under-Secretary of State for Culture, Media and Sport, my hon. Friend the Member for Stalybridge and Hyde (James Purnell).
	I thank my right hon. and learned Friend the Minister of State and welcome her historic proposals, which will for the first time provide a national framework for the work of coroners and, most important, will empower bereaved relatives so that they have a legal right to challenge a coroner's ruling or to ask for a second opinion. The changes will be welcomed by any family whose relatives have died suddenly or violently, but especially by our constituents whose relatives were the victims of Harold Shipman.
	Will my right hon. and learned Friend clarify the time scale for the introduction of the reforms on the ground? Will bereaved families have a right to see cremation forms? Will she implement the suggestion made by families that a simple leaflet be provided for bereaved families so that they know what their rights are? Will the   families of Shipman's victims be able to join the family scrutiny panel and, lastly, will the Government make a wider statement on the progress of the inquiry's recommendations as a whole?

Harriet Harman: I thank my hon. Friend for her welcome for the proposals. I, too, acknowledge the concern felt by the Under-Secretary of State for Culture, Media and Sport and the Under-Secretary of State for the Home Department, our hon. Friend the Member for Wythenshawe and Sale, East (Paul Goggins). I have held a number of discussions with them and they have urged me and the Minister of State, Department of Health, my right hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy), to meet the relatives of those who suffered at the hands of Harold Shipman to ensure that they play a part, by looking at the proposals and giving us the benefit of their too terrible experience.
	My hon. Friend the Member for Calder Valley (Chris McCafferty) made a proposal about cremation forms. I see no reason at all why relatives, or anybody with a justified interest, should not see cremation forms. That is a practical proposal. A simple leaflet, which could be a summary of the family charter, would be extremely worthwhile, and we shall ensure that every family involved has not only the benefit of the rights of the new charter for families, but a summary of it.
	My hon. Friend talked about empowerment for bereaved relatives. One of the problems has been that there is nothing that relatives can do when the system goes wrong except wait until the end of the process and go to the High Court to ask for the inquest to be overturned. They cannot challenge whether an inquest should be held, whether a jury should be empanelled or which witnesses should be called. In the Bill, we will put in place the opportunity for relatives to ask the chief coroner to review the case so that it can be remitted back to the coroner with an instruction from the chief coroner. We do not want to leave it until the end of the process, when things might have gone wrong, to require people to go to the High Court. Early intervention is needed to make it possible for relatives to have their say at an earlier stage.

David Heath: I am grateful to the Minister of State for early sight of her statement. May I gently tell her, as she recognises the delay, that the March 2004 paper said:
	"We do not intend to conduct a further period of public consultation, which could lead to unnecessary delay to this process of reform."?
	That, in itself, was two years ago, so there is a need for some expedition, but the reforms that she announces are entirely welcome. I am particularly pleased to see the focus on the bereaved, which is right. May I ask her a number of questions?
	First, will the right hon. and learned Lady retain the local jurisdiction of coroners? I think that she implied that she would do so in answer to an earlier question, but it is important that coroners' courts be accessible to people, particularly in the circumstances of the death of a loved one. If that is the case, will there be a special arrangement—again, she implied this—for national disasters, such as the sort of thing that we saw on 7 July or previously with the Marchioness disaster, which allows not only a specialist coroner but the ancillary technical and scientific support to enable those matters to be investigated with expedition?
	The right hon. and learned Lady mentioned archaic boundary restrictions. Can anything be done to stop difficulties when crossing national boundaries, both in the United Kingdom and in our relations with overseas jurisdictions? The proposal that all coroners should now have legal training is welcome, but does she recognise that they need to have at least an understanding of the vocabulary of science and to understand some quite technical matters? It is not good enough simply to be a lawyer nowadays; to an extent one must be a polymath.
	Is there still a dearth of pathologists, particularly paediatric pathologists, in forensic work? If so, what is being done to address that? Will coroners' juries be retained? Will coroners' guidance be binding on public authorities? At the moment, coroners often make statements to public authorities, but there is no requirement for them to consider those recommendations. Will there be such a requirement in future?
	Lastly—this is perhaps a minor matter—but what used to be known as treasure trove is an historical remnant of coroners' jurisdictions. Would it not be better to place that—though perhaps within a judicial process—in the Department for Culture, Media and Sport? I look forward to swift progress on the proposals, and the right hon. and learned Lady will have every support from Liberal Democrat Members in making swift progress.

Harriet Harman: I thank the hon. Gentleman for making a number of important points. First, treasure trove is an ancient jurisdiction of coroners. Sometimes, such cases can take two to three years to resolve, because treasure trove is always put at the back of the queue and dealt with locally. That does not make sense. We will make one coroner nationally responsible for treasure trove and get that dealt with effectively.
	The hon. Gentleman asks whether public authorities will take notice of coroners when they make a statement about what lessons they think should be learned after a death. The higher public profile and higher national standing of the coroner service that Dame Janet Smith thought so important—we certainly agree—will ensure that public authorities are not able perhaps to leave on one side proposals made by a much better respected coroners system. Yes, there will still be coroners' juries. In addition to the mandatory cases where coroners' juries are required, coroners will have the discretion to use juries.
	The hon. Gentleman asks whether coroners will have training, particularly in medicine and health issues. They will be qualified lawyers. All of them will have training, including medical training. In addition, they will have their own dedicated health advice, which they do not have at the moment. That will be part of a central budget which will be given to each and every coroner so that they have dedicated health support for medical issues. There is a dearth of pathologists, which also concerns colleagues in the Department of Health and the Home Office.
	On foreign deaths, it is particularly distressing for bereaved relatives who have involved themselves in a full inquest in, say, France or Spain, to come back to this country and go through the process all over again. We plan to end that. If there has been a satisfactory inquest, albeit abroad, it does not have to be repeated.
	Coroners will have a local jurisdiction and will be accessible. There will be fewer coroners, however, because they will be full-time. It will be their dedicated job and they will be professional coroners, so there will be fewer of them.
	As far as national disasters are concerned, it is ridiculous to expect a fragmented local general service to deal with major national emergencies or disasters. It is not fair on the coroners' officers, the coroners and, above all, the relatives. Our proposals will enable that to be handled effectively.
	I can only agree with the hon. Gentleman on timing. I have perhaps waited longer than most other hon. Members for this to happen because I first went on record as complaining about the problem 30 years ago. We have all waited a long time. Let me explain the timing because I was possibly not clear about that in response to my hon. Friend the Member for Calder Valley (Chris McCafferty). We expect to put the draft Bill before the House in April or May. We expect to have the Bill proper available for the scrutiny of the House in November or December.
	I perhaps did not answer the question of the hon. Member for Huntingdon (Mr. Djanogly) about family scrutiny. I expect that to take place in the House so that colleagues who intend to involve themselves in the debate on Second Reading and in Committee can see a moderated discussion by people who have practical and recent experience. It will make for a much more sensible debate if we have that running alongside the Select Committee's important work.

Several hon. Members: rose—

Mr. Speaker: Order. I remind the House that Back Benchers should ask only one supplementary question.

Jon Trickett: I unreservedly welcome my right hon. and learned Friend's statement. I speak on behalf of the family of my constituent, Sean Hutchinson, whose body was left in a coroner's morgue for more than two years while the coroner's officers failed to discover his identity, leaving the family in a state of great distress, not knowing whether he was alive or dead. In subsequent conversations with coroners, I have come to the view that they are one of the remaining unreformed relics of feudalism—unaccountable, unmanaged and often arrogant. Will she press ahead with absolute urgency to bring comfort to families in the future?

Harriet Harman: We will press ahead with that. I pay tribute to my hon. Friend's work on behalf of his constituents. He has tabled many questions to which most of my answers have been, "I don't have this information. Sorry, I can't tell you. I don't know." He has exposed that that is not good enough, especially when it comes to accountability to the House. The Bill will sort that out.

Alan Beith: In welcoming the statement, I assure the Minister that the Select Committee will start work tomorrow by taking evidence from Dame Janet Smith on the proposals. However, does the Minister accept that if she is not careful the removal of part-time coroners might lead to a situation in which bereaved relatives in small communities in remote areas do not have access to a coroner locally? What will it cost, bearing in mind the amount of cross-subsidy of counsel and the Court Service in the current system?

Harriet Harman: It will cost—this is a rough estimate—something in the region of £5 million extra a year. The right hon. Gentleman asked whether changing to dedicated full-time coroners will mean that people have to wait longer—

Alan Beith: Travel further.

Harriet Harman: And travel further. One thing that has made families wait longer is that solicitors in private practice who are also coroners sometimes adjourn an inquest to deal with something in their private practice. There is no reason why coroners should not travel to the families. We will ensure that Her Majesty's Court Service buildings, county courts and magistrates courts are available for the coroners to exercise their jurisdiction locally, so that they can work around the families and circumstances, rather than expect the families to work around them or their private practice as solicitors.

Michael Meacher: Although I very much congratulate my right hon. and learned Friend on her proposals, will she ensure that in the most contentious cases jurisdiction is always placed in the hands of a group of the most senior coroners, who have full knowledge of human rights implications; that excessive delays of sometimes up to three years between death and a coroner's hearing are not allowed to happen in future; and that there is an obligation to provide information at the outset to families about their legal rights, as well as access to legal aid, as of right without a means test?

Harriet Harman: As my right hon. Friend will know, Lord Carter is reviewing legal aid in the Department for Constitutional Affairs. I totally agree about information being made available at the outset as a matter of routine. I agree that excessive delays are not acceptable. Sometimes one sees a report of an inquest and on looking further down one realises that the death was two or three years previously. My right hon. Friend makes an important point about the seniority of coroners dealing with difficult or complex cases. Perhaps he is the one person who has spoken today who has been complaining about coroners services even longer than I have.

Humfrey Malins: I commend to the Minister the work of the Surrey coroner, Mr. Michael Burgess, and his excellent deputy Mr. Nick Benger. Their problems over the past few years have been essentially practical—shortage of staff, IT problems, shortage of coroners offices and difficulty in finding a place fit for a jury where an inquest can be held. Will the Minister ensure that her reforms address some of the practical problems faced by that excellent coroner and his deputy?

Harriet Harman: I thank the hon. Gentleman for his comments about the Surrey coroner and his deputy. He has described the problems of a service that has been affected by blight. Everyone has been so expecting something to change that it has been very difficult for coroners and officers to have any certainty for the future. I hope that, as from this statement, there will be an end to the blight and that we can support much better the work of the many dedicated coroners officers. I pay tribute to the Coroners Officers Association, which throughout the years of blight has tried to improve professionalism with precious little support. I hope that those things will be sorted out.

Dari Taylor: I warmly welcome my right hon. and learned Friend's statement. For seven of my eight years in this House I have asked for reform of the coroner's office, because on Teesside we have waited years and years for a coroner's report. When a 12-year-old girl dies in an accident while playing with a swing, that is a tragedy; when her mother has to wait two years and three months to find out the cause, that is desperately bad for all of us. I hope that my right hon. and learned Friend's reforms will change it. I seek reassurance that the national framework will ensure that coroners have the power to fill gaps in the service so that we all benefit from a professional service.

Harriet Harman: The chief coroner will be able to issue practice directions and to set out what is expected of coroners. It is nowhere set out nationally that timeliness matters. We have to be sure, and we will be, that the situation that my hon. Friend described cannot occur.

Patrick Mercer: The right hon. and learned Lady will be aware that the Oxfordshire coroner is responsible for inquests into the deaths of our servicemen who are returned from Afghanistan and Iraq via RAF Brize Norton. She will also be aware that there is a huge backlog of those inquests and that that is causing wholly unnecessary suffering to the families. Will she assure me that that situation is under control and further outline how her changes will prevent it from happening in future?

Harriet Harman: The hon. Gentleman has raised this on a number of occasions and it is of great concern. When we get rid of the boundary restrictions—coroners cannot sit outside their jurisdiction and are prevented from working where there is a backlog—that problem will be easily solved, but I do not expect people in the circumstances that he described to wait until we have legislated on that. We must address ourselves anew to do what we can within the current creaking system to sort out that situation.

Keith Vaz: I congratulate my right hon. and learned Friend on her excellent statement, but may I press her on the issue of qualifications and training? Surely, it is not enough just to say that qualified solicitors should be employed and to give coroners a pot of money so that they can seek training themselves. Will she look at the possibility of an additional qualification or, at the very least, a course of training for coroners organised by the new Commission for Judicial Appointments?

Harriet Harman: We will certainly look into the point that my hon. Friend has made about training and qualifications.

James Clappison: In framing her proposals, will the right hon. and learned Lady look at the Potter's Bar rail crash, as it is expected that the inquiry will take the form of a coroner's inquest, even though the families wanted a full public inquest and the Hertfordshire coroner had concerns about the holding of an inquest? Almost three years after the crash, it has just been announced that a judge is to be released to hold the inquiry. Three years is too long to wait for an inquiry into such a major incident involving many families.

Harriet Harman: As the hon. Gentleman rightly points out, what we lack is the capacity for leadership and certainty, which would enable the right inquiries to be made at the earliest possible opportunity. I agree that it is unfair that an inquiry has taken so long. The national leadership of the chief coroner means that there will be someone at a national level to liaise with the relevant parties and ensure that what the hon. Gentleman says does not happen in future.

Vera Baird: May I strongly welcome the proposals for proper appointments, training and discipline for coroners? The people of Teesside have long suffered under a part-time coroner, now aged 76, who has never seen the need to acquire any administrative skills or management experience, and has often had a backlog of 200 or 300 cases over six months old. All the MPs in the area have witnessed people crying at their surgeries because they are quite unable to grieve while waiting two, three or four years for an inquest to understand what happened to their loved ones. Can my right hon. and learned Friend give me an absolute assurance that the proposals will guarantee that my constituents and those of my hon. Friend the Member for Stockton, South (Ms Taylor), who has mentioned the problem, will never suffer again under what is, after all, a public service?

Harriet Harman: My hon. and learned Friend's persistence on behalf of her constituents is one of the driving forces behind the proposals. Hon. Members have tabled parliamentary questions, and many have written letters that include anguished stories. We are determined to make absolutely sure that people have a proper, effective and humane service. Everyone who goes to a coroner faces a sad and often tragic situation, so the current system is not acceptable. My hon. and learned Friend's complaints have been well understood, and the legislation will deal with them.

Philip Hollobone: Following the question asked by my hon. Friend the Member for Newark (Patrick Mercer), why is it not possible to re-allocate some of the work from the Oxfordshire coroners to county coroners nearer the homes of the relatives? After the reforms, does the Minister intend to have at least one coroner in each county town?

Harriet Harman: We expect that there will be more than one coroner in cities. There will be at least one coroner in every county, and usually more than one, depending on the population. I cannot give a specific answer, but I accept the point that the hon. Gentleman has made. Coroners have mediaeval jurisdictions, which they control—no one else is allowed to sit there, and they are not allowed to sit in anyone else's jurisdiction—so it is impossible to do something simple and straightforward such as reallocating a coroner to another jurisdiction to deal with a backlog. That is the problem with the statutory legal framework, and it is a simple but important thing that we will change.

David Kidney: Like my right hon. and learned Friend, I compliment Tom Luce and Dame Janet Smith on their influence on the reforms. As for the family charter that my right hon. and learned Friend promised, must it wait for the legislation or can a first edition be published now?

Harriet Harman: The family charter does not have to wait. I have had meetings with family organisations of the bereaved, which have been incredibly helpful and are very clear about what they want. The problem is that it is not enforceable, so we cannot ensure that it is given to relatives or that coroners abide by it. We will certainly give the family charter extra momentum, but it is not until we legislate that we will be certain that we can apply those standards. There will also be an inspection system, and one of the things the inspectors will do is look at whether each coroner is properly implementing the family charter. I endorse my hon. Friend's remarks about Tom Luce and Dame Janet Smith.

Chris Ruane: I congratulate my right hon. and learned Friend on her statement and fully endorse the changes that she proposes. If one of the new, more professionalised coroners were to make a specific recommendation, such as that a death or an incident should be the subject of a full-scale public inquiry, what weight would be given by her Department to such a recommendation?

Harriet Harman: A recommendation about lessons that need to be learned from a highly professionalised coroners service that has considered all the evidence appropriately will carry much more weight than it does at present.

Anne Snelgrove: I welcome my right hon. and learned Friend's statement, particularly on behalf of the Mullane family from my constituency, the family of Julia Pemberton and her son William, tragically murdered by her husband Alan in November 2003. Will my right hon. and learned Friend assure me that her proposals will bring an end to the type of disgraceful treatment that the Mullane family experienced from two coroners? The first declined to stand down initially, despite his strong link to Alan Pemberton, and the second treated the family with hostility and failed to investigate conflicting evidence under article 2 of the European convention on human rights. Will she assure me that her proposals will mean that coroners will never be allowed to behave like that again?

Harriet Harman: I thank my hon. Friend for raising the case. It was a tragic case of a woman and her son being killed and then the husband, who had killed them both, committing suicide. One of the most tragic aspects was that the family, whom I had the opportunity to meet because Refuge, the organisation, brought them to see me, said, "We know this is supposed to be an inquisitorial system, but we felt it was an adversarial system, and we felt that it was against us." Any system that makes bereaved relatives feel that the whole system is weighted against them is totally unsatisfactory. I thank my hon. Friend for bringing that case to my attention and also for the support that she is giving the relatives in such unacceptable circumstances. In the House we have recently legislated for homicide reviews in domestic violence cases, but, arguably, if the coroners system were working properly, we would not need homicide reviews, as all the relevant information would be brought to the coroner and proper lessons would be learned. The reviews have sprung up because the coroner system has not been dealing appropriately with these cases.

Shona McIsaac: For some years I have been involved with Grimsby resident Shanie Parkin over the tragic death of her son Bradley. Shanie's experiences are similar to others that have been aired in the House today. She has been campaigning for change, and I am sure she will welcome my right hon. and learned Friend's statement, particularly in relation to family involvement, which is what Shanie felt was most lacking, and on how to get a second opinion if there are any doubts. Can my right hon. and learned Friend give us a few more details about that? She will be meeting Shanie later this week, and I hope she will accept from her a petition calling for changes to the coroners system.

Harriet Harman: I look forward to meeting my hon. Friend and the constituent she brings to see me, and I will certainly accept the petition. We must listen to people when they say the system is not working, and we must make sure that the legislation that we introduce deals with that. It is extraordinary that in the past the public interest was seen as having nothing to do with the family's interest. Of course coroners must find out the facts in the public interest, but it is also in the public interest that the families are treated properly and get their answers.

Point of Order

Owen Paterson: On a point of order, Mr. Deputy Speaker. Today, the Home Secretary has slipped a written statement into the Library entitled "Police reform: Update on police force restructuring". In my case, West Mercia will be merged into a monster regional force despite having been judged the No. 1 force and despite an unprecedented public relations campaign showing, in one case, that 96 per cent. of respondents want it to stay intact. Have you had any notification from the Home Secretary that, instead of slipping a two-page written statement into the Library, he will come to the House and make himself accountable so that we can question him on this extraordinary national reorganisation?

Mr. Deputy Speaker: I have had no notice of such a statement. Written statements are of course a matter for Ministers in terms of the way in which they make them available to the House and put them in the Library.

Police Finance

Paul Goggins: I beg to move,
	That the Police Grant Report (England and Wales) 2006–07, HC 845, a copy of which was laid before this House on 31 January, be approved.

Mr. Deputy Speaker: For the purposes of the debate, and if the House is agreeable, we will also discuss the other two motions on the police on the Order Paper:
	That the Police Grant Report (England and Wales) 2004–05: Amending Report 2005–06, HC 847, a copy of which was laid before this House on 31 January, be approved.
	That the Police Grant Report (England and Wales) 2005–06: Amending Report 2005–06, HC 846, a copy of which was laid before this House on 31 January, be approved.

Paul Goggins: Let me begin by eating a little humble pie and acknowledging the valuable role undertaken by the Joint Committee on Statutory Instruments in scrutinising orders and reports laid before the House to ensure that they are fit for purpose. I regret that the three police grant reports fell foul of that scrutiny in that they were dated incorrectly. I am grateful to the Committee and to the Committee Chairman for agreeing to give them retrospective consideration, thereby not delaying today's debate.
	The Government have a solid record of investment in policing in England and Wales. The funding settlement for the coming two years will build on substantial and sustained growth since 2000–01. Government grant and central spending on services for the police will have increased by nearly 50 per cent., or more than £3.5 billion, between 2000–01 and 2006–07.

Crispin Blunt: In delivering his litany of good news, will the Minister confirm that Home Office funding per head of population for Surrey police authority has fallen in cash terms since 1997, resulting in a 22.7 per cent. real decrease in funding for Surrey police?

Paul Goggins: I am sure that we can go into detail about Surrey and other parts of England and Wales as the debate ensues. I look forward to the hon. Gentleman trying to catch your eye, Mr. Deputy Speaker, to make a contribution later. The point that I am making, in setting the context for the debate, is that there has been a huge and sustained increase in investment in policing over several years. The hon. Gentleman's constituents are reaping the benefits, as indeed are mine and those of all hon. Members.

Nicholas Soames: I understand the point that the Minister is making. Overall, the sum of money has increased, but he made a very sweeping statement at the beginning of his speech. Does he realise that the settlement for Sussex police this year will place in jeopardy the significant improvements that they have undertaken?
	Further, is the Minister aware that this funding settlement will mean that the counter-terrorism and dedicated security post that the force had anticipated will no longer be funded to the same level, and that it will receive about £400,000 less for resourcing such a key priority? That is an extremely unsatisfactory state of affairs. I urge the hon. Gentleman to examine a fairer way of distributing this money.

Paul Goggins: We will get the opportunity to discuss some of these details. The dedicated security post to which the hon. Gentleman refers represents a major change in the way in which the funding of police services is being organised this year. That will now be provided through central funding, which obviously involves an adjustment. I acknowledge the improvements in Sussex and in many other parts of the country. I believe that this settlement will enable forces to sustain the improvements and changes that they have made. If we look, for example, at the number of staff that the police service has today, we find that more than 234,000 people are engaged in delivering policing—an increase of nearly 15 per cent. since 1997. Police numbers are historically high, at 141,270 on 30 September 2005. We are committed to maintaining a well-staffed police service.

Philip Hollobone: Currently, I am spending time on the parliamentary police scheme and have been out on patrol with the Kettering police, who operate a shift system. Is the Minister aware that although it is true that police numbers, certainly in Northamptonshire, are at record levels, only one officer out of nine on a shift in Kettering was capable of driving a police car with the sirens and lights flashing? He was the only grade-one qualified police officer on that shift. Police numbers might be at record levels, but sadly, due to budget shortfalls, not all the officers are trained to the standards that the public would expect.

Paul Goggins: I pay tribute to the hon. Gentleman for taking part in the parliamentary police scheme. Hon. Members of all parties engage with it, and that is a very effective way of showing support for the police service as well as of learning about some of the challenges that it faces.
	Clearly, I cannot comment on the particular circumstances that the hon. Gentleman described. However, the important thing is that those who manage our front-line police services should be able to bring together an appropriate mix of qualifications, professional experience and so on, so that we get the best policing possible in our local communities.
	In addition to increasing the numbers, we are actively reducing bureaucracy through a programme that we expect will yield the equivalent of an extra 12,000 police officers by 2008. Again, that will free up more police officers for the front line. Police officers are now supported by more than 6,300 community support officers, whose numbers are expected to increase by about 5,600 next year. That will take us to nearly 12,000—about half the total number of community support officers that we have pledged to deliver by 2008.

Tony Baldry: The Minister has been generous in giving way.
	Everyone welcomes the new community support officers, and I hope that that excellent news will mean enhanced policing in rural areas. Concern has been expressed, however, in the Thames Valley police, because although there is finance for community support officers for the next two years—they appear to be funded for that period—what will happen after that? Superintendents and senior police officers are concerned that at the end of the two years, they will have to make invidious decisions about whether to keep on the community support officers or get rid of regular, uniformed police constables. Will the Minister give an undertaking that the funding for community support officers will not be time limited and that it will carry on as part of the settlement, year on year?

Paul Goggins: I am sure that the hon. Gentleman will understand that I cannot predict in fine detail how community support officers will be funded in 2008–09, because those years are in a spending period for which we do not yet have the details. He will understand from the explanation that I offer now that funding police services is, in essence, a balance between central funding and local funding—through specific grants, general grants and so on.
	As community support officers become firmly embedded in front-line policing, the funding of those officers will reflect that balance, as the hon. Gentleman and all of us would expect. How that balance will be achieved is a matter for further deliberation and no doubt further debate. However, beyond debate is the fact that community support officers, as the hon. Gentleman says, add enormously to the capacity of neighbourhood policing and to the reassurance of our constituents, and they will do so in even greater numbers in the years ahead.

Jim Cunningham: Last week, I said to the Home Secretary—and I briefly say to the Minister—that one of our difficulties in Coventry and the west midlands is in being able to contact police or a senior police officer during the weekends, particularly in the summer when all sorts of problems go on in our neighbourhoods. Will the Minister say, or give an indication of, how many police community support officers will be introduced in, for example, Coventry and the west midlands as a whole?

Paul Goggins: I cannot give my hon. Friend a precise figure at this stage. However, his constituency and police area will benefit enormously from the kind of increase in community support officers that we are seeing. As I say, their number will double over the next period and will rise to 24,000 by 2008. My hon. Friend can rest assured that he will have a fair share of those community support officers, who will be part of the neighbourhood policing team for his constituency.

David Taylor: In Leicestershire, the population of almost 1 million people has benefited greatly from police investment over the past nine years or so. Of that, there is little doubt. Is the Minister aware, however, that the individual police precept in Leicestershire is becoming substantial? Is he happy that the way in which central support is calculated for police authorities is adequate, and should it not be rising at a greater level to reduce the impact of the precept, particularly on older people and those with lower means?

Paul Goggins: There is a balance to be struck between central and local funding, but last year's settlement meant that no police authority had to go beyond a 5 per cent. increase in precept. On the details of today's settlement, I believe that authorities will not have to exceed 5 per cent. in the coming year, and the Government will take a dim view of any that has a mind to do otherwise.

Alan Beith: rose—

Nicholas Soames: rose—

Paul Goggins: Members who attend debates in which I participate will know that I am always willing to give way. However, I have a responsibility, too, to make some progress. If hon. Members will acknowledge that, I shall happily give way.

Alan Beith: I am grateful. While the Minister is dealing with police precepts, he must recognise that compulsory reorganisation, as announced by the Home Secretary today, could lead council tax payers in Northumberland to have their precept increased by as much as 30 per cent. because of the process of levelling with the other forces involved. Given that that force meets all the Government's criteria, can the Minister give some assurance that precept equalisation will not take place in the reorganisation of forces?

Paul Goggins: I shall come on to those issues. Funding of the restructuring announced by my right hon. Friend the Home Secretary today will involve a number of angles. Central Government will invest, and I shall today outline £125 million of that over the next two years, an investment which will clearly be important. Secondly, police authorities have existing investment plans, which they will be able to reshape to reflect the new force structure.
	Yes, some cost will fall on the local police authorities, but they will reap the benefit in efficiencies and savings. We estimate that we shall begin to see those benefits after three years, and they will play back into the funding of police authorities. Funding will be a mix of those three factors, but it is sustainable and should not bear down any more heavily than I have suggested on local council tax payers.
	I shall take an intervention from the hon. Member for Mid-Sussex (Mr. Soames), but will then make progress.

Nicholas Soames: I am sincerely grateful to the Minister and promise not to intervene on him again. He is being extremely courteous.
	I wish to make a particular point. Sussex police has already planned to deliver £6.8 million in efficiency savings, but the final settlement will require further savings of £1.9 million in order to constrain any precept increase to below 5 per cent. I know that the Minister understands that that will almost certainly mean a real threat to service delivery and to the greatly improved performance of Sussex police. It really is not a decent or proper way to deal with Sussex police authority.

Paul Goggins: I am happy to pay tribute to Sussex police for its work, both in its financial administration and in front-line policing. It achieved impressive efficiency savings for the current year, and the expectation is that it will make further efficiencies next year. That expectation is not unusual now in any public service. There is an expectation of an ongoing search for efficiencies that can feed back in additional cash for the front-line services that we want more of.
	For the first time, this year the Government have provided planning totals for two years. I shall set out the police funding settlement for 2006–07. The figures for 2007–08 were set out as part of the provisional settlement announced and made on 31 January, and will be finalised next year. The settlement will support our key policing priorities published in the national community safety plan: reducing overall crime; bringing more offenders to justice; providing dedicated, visible, accessible and responsive neighbourhood police teams; tackling serious and organised crime, including improved intelligence and information sharing between partners; and protecting the country from both terrorism and domestic terrorism.
	The total provision for policing grants and central provision in 2006–07 will be £10.574 million, an overall increase of 5.1 per cent. on the previous year. Most of this provision—some £7.372 million—is for the police general grant, which increases by 3.3 per cent. This allows us to provide a broadly flat-rate grant increase of 3.1 per cent.

Paul Truswell: When is it the intention of my hon. Friend and his colleagues to move to an allocation system that is based more on the funding formula so that forces such as West Yorkshire can receive some of the £14 million that the operation of floors and ceilings this and next year will cost them?

Paul Goggins: I shall say more about that later. However, my hon. Friend is right in that we have moved to a new formula arrangement that more adequately reflects the level of need in his community and throughout the country. There is a balance to be struck between meeting need and providing a stable framework for policing in every community. The answer is that we shall move steadily towards an arrangement that reflects that need. I hope that my hon. Friend will understand that we need also to ensure that stable funding is available for every area. As I have said, I will come on to that later. Perhaps the interventions to which I have responded reflect that if I persevere with my speech, we shall arrive at some of the points that hon. Members are concerned about.
	Specific revenue grants will be an estimated £1.356 million, which is an increase of 9.7 per cent. That is mainly because of the establishment of specific grants for pensions. In addition, my right hon. Friend the Home Secretary recently announced an extra £93 million for counter-terrorism in 2006–07, and £145 million in 2007–08. This increases the overall uplift in policing provision to 6 per cent. in 2006–07, and 4.9 per cent. in 2007–08.
	The police grant report deals with Home Office general police grant for revenue expenditure. This includes £4.143 million in principal formula grant. The amounts payable to individual police authorities are listed in the report, which has been presented to the House. Additionally, police authorities will receive £3.229 million revenue support grant as local authorities. That makes a total of £7.372 million, an overall increase of 3.3 per cent. on 2005–06. Main force allocations were set out in the ministerial statement of 31 January, which was made by my right hon. Friend the Minister for Policing, Security and Community Safety.
	In addition, we are providing £193 million in special formula grant, where we have decided to consolidate four specific grants into a single pot for each authority. The amounts payable to individual police authorities are listed in the police grant report. Each authority will receive the actual or estimated level of funding that it currently receives from these grants. We hope that that rationalisation will enable authorities to operate more flexibly. The special formula grant includes the £30 million rural policing fund, £69 million for special priority payments, £48 million for London and south-east allowances and £46 million in forensic grant.

Elfyn Llwyd: Will the Minister give way?

Paul Goggins: I will give way in a moment.
	We expect authorities to honour commitments and to agree policy initiatives to build on the outstanding successes that have been achieved in these areas.

Elfyn Llwyd: In future years, will each component of the new overall grant be shown as a separate entity? For some years, I have taken an interest in the rural policing grant, which has been at standstill for the past five or six years. I should like to see an increase as and when appropriate in that limb. Will the amalgamation of four or five grants into one mean that each heading will be shown differently as a different heading each year?

Paul Goggins: I understand that that will be the case next year, when the settlement will use similar headings to this year's. I cannot confirm anything beyond that, but the hon. Gentleman makes a good point that I shall bear in mind for the future.

Crispin Blunt: Will the Minister make it clear that now that the funds have been amalgamated into one, a police authority will have the flexibility to manage its budget outside those areas, if it wishes? Will he explain why the crime fighting fund has not been put into the pot as well?

Paul Goggins: I shall come to the crime fighting fund in a little while. I wanted to make my final remark before giving way to the hon. Gentlemen to make the point that there will be more flexibility and the money will be handed over to the authorities. However, we anticipate that the work that the money has funded will continue because we do not expect authorities to walk away from it. Clearly, there needs to be more flexibility, so we are happy to devolve more decision making to a local level. However, we expect that the strands of work will continue. They are important, which was why they were funded in such a way.
	Once the overall total for spending has been set, it must be fairly distributed to take account of local needs and resources. We have updated the 1995 funding formula, which used data from the early 1990s, to bring it in line with modern conditions. The formula changes that have been made are in line with the wider revision of funding formulae for local government services. Police funding has not been considered on its own because it was part of a wider review.
	As well as updating the formula, which is 10 years old, we need, as I said earlier, to maintain the stability of funding during a period of major structural change for the police service. We have thus decided to apply a broadly flat-rate increase in general grant of 3.1 per cent. for all police authorities in 2006–07. The increase will enable all police authorities to set final budgets that do not place excessive burdens on taxpayers.

Jim Cunningham: When my hon. Friend fixed the West Midlands police budget, did he take account of the amalgamations? If so, can he identify how much will be available?

Paul Goggins: It will be possible to identify how the grant works out in each case. I will be happy to write to my hon. Friend to give him the specific information that he requires.

Michael Fabricant: The hon. Member for Coventry, South (Mr. Cunningham) raises an important point. The Minister said about 10 minutes ago that £125 million will be made available for the mergers, but many senior police officers estimate that they will cost in the region of £500 million, so forces such as Staffordshire, Warwickshire and West Mercia—if they can be persuaded to go in with West Midlands police—will have to cough up the rest. Does the Minister think that that is fair?

Paul Goggins: I refer the hon. Gentleman to the comments that I made earlier. It is not as simple as that. The £125 million investment will be made. Existing plans will need to be reshaped to reflect the new structure, which will involve a substantial amount of money. I do not deny the fact that an additional amount will need to be found locally, but that is where the benefits of the investment will be felt due to the greater efficiencies that come through—[Laughter.] The hon. Member for Somerton and Frome (Mr. Heath) scoffs, but it stands to reason that if four police forces that were running four human resources departments come together and have only one such department, there is the possibility of making efficiency savings—that is common sense.

Gordon Prentice: On the point about the cost of restructuring, we heard today that Lancashire constabulary will merge with Cumbria. Lancashire police authority has done some modelling work and tells me that Lancashire council tax payers will pay for the merger with the police element of their council tax going up by 13 per cent., although council tax payers in Cumbria will get a reduction of 22 per cent. I just wonder how that will be equalised out. It would be wholly unacceptable for Lancashire council tax payers to be paying through the nose for that merger with Cumbria.

Paul Goggins: I know that there is a lot of speculation about how much the proposals will cost in different areas. The figures will bear greater and closer scrutiny. My right hon. Friend the Home Secretary has established a working group of all the key partners—the Association of Police Authorities, ACPO, other Departments and other professional experts—to look very carefully at the figures. My hon. Friend is correct, however, to say that as forces come together, clearly there will have to be some process for equalising the precept over different authorities, and that will need to be done in a careful, thoughtful and planned way. The announcement that the Home Secretary has made today about the north-west and other areas is a basis for further discussion throughout those areas. Discussions will continue in the search for a way ahead on which everybody can agree. As with all things, consensus would be the best way forward.
	I intend, in the limited time that we have for debate, to make some progress and allow time for other hon. Members to contribute. I say in response to the comments by my hon. Friend the Member for Pudsey (Mr. Truswell) that authorities that have had their grants scaled back from what the formula alone would have offered may feel that they are not getting their full share of the pot. However, we have had to take full account of pressures right across the board to ensure that all authorities can keep police precepts at sustainable levels next year, and that policing services are maintained. We have done everything possible for next year to maximise the increase in general grant and to increase the scope for police authorities to determine their own spending.
	The broadly flat-rate increase will benefit 24 police authorities, which will receive over £137 million more than they would have done under the strict application of the new funding formula. Although some authorities, such as the one that serves my hon. Friend's constituency, are losers from this, there are in fact more gainers than losers because we are trying to provide stability. Indeed, three of the Welsh authorities will benefit to the tune of £9.3 million in special Home Office grant.
	The settlement continues to take account of our commitment to improve efficiency and effectiveness in the police service. We expect the police service to build on impressive efficiency gains of some £316 million in 2004–05 and projected gains of £360 million in 2005–06, on the way to delivering on a target of over £1 billion of cumulative gains by the end of 2007–08.
	Increasing the proportion of time that police officers spend on front-line policing is, of course, one of the ways forces can demonstrate efficiency gains so that skilled trained police officers are free to make the most effective use of their time. Reducing bureaucracy, exploiting new technology, more effective deployment of officers and more effective use of support staff will all help to increase the amount of front-line policing. We expect other efficiency gains to be delivered through more efficient working and commercial practices—for example, through collaborative procurement and shared services for human resources and finance.

Lynne Featherstone: On the flat rate, does the Minister recognise that authorities that will now get significantly less than they would have done under the Government's own league-based formula are in danger of not achieving what he has just set out, and of having to make reductions or raise the precept beyond the rate that he has suggested? The Association of Police Authorities is suggesting 6 per cent. as a minimum, which would mean a projected council tax rise of 12 per cent.

Paul Goggins: We had this discussion last year when the Association of Police Authorities was predicting that the gap would be even bigger than it is predicting this year. The reality is that police authorities have been able to fund services in such a way that the number of staff, including front-line staff, has increased, and no authority has had to exceed an increase of 5 per cent. It was therefore possible to ensure that services were sustainable and fundable this year, and I expect no less for next year.
	Police authorities have seen a huge increase in Government provision in recent years, and this has been matched by a significant increase in the amount of revenue raised locally for policing through council tax. The extra funding has not only paid for inescapable pressures but greatly expanded the service. For next year, we have again done everything possible to maximise the increase in general grant. With the delivery of efficiency gains and prudent budgeting, there is no reason for police authorities to set excessive increases in police precepts for council tax.
	The clear message that the Government were prepared to cap budgets this year has helped to drive down prospective precept increases. In the event, no police authority faced any capping action. The capping criteria for 2006–07 have not yet been set. The Government will decide them after authorities have set their budgets for next year. Meanwhile, we have made it clear that we expect average council tax increases of less than 5 per cent. across England. We will not allow authorities to impose excessive increases, and we are prepared to use our capping powers if necessary. Council tax in Wales is a matter for the Welsh Assembly Government.

Mark Francois: I notice that Essex and the other counties in East Anglia were not mentioned in the statement today. The standard precept in Essex is approximately £105 for a band D property, and in Norfolk it is £145. In the event of a merger, with averaging up, the increase in the policing precept for Essex residents will be approximately 14 per cent. How can it be right for the Government to tell everyone that they have to keep to an increase of 5 per cent. or thereabouts, while at the same time arguing for a merger that would result in a council tax increase of 14 per cent.? Where is the logic or the justice in that?

Paul Goggins: The hon. Gentleman is running two issues together. I shall try to separate them for him, as I tried to do for my hon. Friend the Member for Pendle (Mr. Prentice) a moment ago. In relation to what the Home Secretary has said today about the police force in the hon. Gentleman's area, he will be writing to that police force—as he will to all five regions in which the picture is a little less clear—to set out a process and a timetable for discussions to try to reach consensus on those matters. As new force structures emerge, the precept for the different component parts will have to be merged, and that will need to be done very carefully.
	As part of the consultation exercise on this funding settlement, we received 47 written representations covering 36 police authority areas. All representations have been taken into account in reaching decisions on the funding proposals before the House today. I have already dealt with some of the main points raised, but I will now turn to some other concerns.
	A new system of financing for the police pension scheme will come in effect on 1 April. Police authorities will no longer have to meet the cost of paying pensions to retired officers from their operating account. Instead, spending on pensions will be accounted for separately. Each authority will pay both the employer's and the officers' pension contributions into—and pay pensions from—a new pensions account. If there is a shortfall in the authority's account, central Government will meet that shortfall. If the account is in surplus, that will be recouped so that no authority is subsidised at the expense of others.
	Under the old system, an increase in the number of retirements in a year could put pressure on operational funds and create volatility in the amount of funding available for operational policing. The new system will ensure that any rise in the cost of pensions brought about by a rise in the number of officers in retirement will not be paid for at the expense of operational policing. In making these changes, we did not want to place any cost burden on the local or national taxpayer. Police grant is therefore being adjusted to take into account the pension deficits or surpluses in 2005–06 and 2006–07, based on forces' own projections and estimates.
	A number of forces were unable to provide accurate projections for the provisional grant settlement in December. We are satisfied that those data errors would have been corrected earlier had time permitted a fuller scrutiny. I have therefore responded to representations by taking the amended data into account. In making the changes, I have increased by £14 million the notional grant base on which grant for 2006–07 is established. Without any additional grant, the cost would be spread across all authorities, and would effectively reduce the floor increase from 3.2 per cent. at the provisional settlement to some 3 per cent. now. I have, however, been able to add £7 million to general grant and Welsh support, allowing a final floor increase of 3.1 per cent.
	Several authorities are concerned because their police grant reduction was based on a notional pension deficit in 2005–06, a year of historically high retirements and net pension costs. However, I am not persuaded that any reasonable alternative approach would have been fairer overall, so I have not altered the method for calculating the change between the old and new systems. I am confident that when pension pressures rise towards the end of the decade, police authorities will benefit from the changes that we are introducing now.

David Heath: Can the Minister tell us how he will deal with additional pension requirements resulting from restructuring, and the redundancy costs involved? Will they be dealt with by central Government or by the relevant police authorities?

Paul Goggins: The new pension arrangement will take account of the circumstances of restructuring. As I have said, the local police force, or authority, will pay the pensions and collect the contributions. If the authority is in deficit because of that, the deficit will be made good by central Government, and if it is in surplus we shall take the money. Under the new system the central contribution to pensions this year is some £300 million: that is coming from the centre to make the system work. I should have thought there would be common cause throughout the House that that was a good move. The fact that a large number of officers retire in one year should not affect front-line policing. I hope that that is acceptable; it is the new system, and it will serve us well in the future.
	I have made some observations about the initial costs of force restructuring, but it might be helpful if I emphasised a couple of points. Considerable thought has been given to the handling of the initial costs of amalgamations. We expect force business cases to be robust, and to show how force amalgamations can lead to significant economies that can be reinvested in neighbourhood policing and protective services.
	We recognise that some issues need further discussion, and we are working closely with forces and authorities in helping to redefine their business cases. That work is supported by Her Majesty's inspectorate of constabulary, senior police officers, Home Office staff, the Chartered Institute of Public Finance and Accountancy and others. We are also meeting chief officers and police authority chairs to discuss outstanding issues.
	My right hon. Friend the Home Secretary made a statement to the House today setting out the initial findings of the police restructuring review in relation to areas where the assessment of protective services has indicated a clear case for restructuring. In other areas, the Home Secretary will continue to review the proposals for restructuring that have been submitted, on the basis of the protective service assessments and the financial and organisation analysis that has been developed. We will continue to work with police forces and authorities in each area over the coming weeks to establish the best way in which to proceed.

Crispin Blunt: Will the Minister confirm that 30 external consultants employed by his Department are working under the other organisations that are assessing the business cases, and that each of them is being paid £1,500 a day?

Paul Goggins: I cannot confirm the precise figure, but we are involving a range of experts so that we can get the assessments absolutely right. We have already been presented with an array of different estimates and figures this afternoon. It is important for the figures to be robust, and we need the best minds to help us analyse them. It would be sensible to invest in that at this stage in order to produce the best possible outcome. However, I should emphasise that such matters have not simply been put out to external consultants. Consultants may have had some involvement, but essentially, these are issues for the police authorities, the Association of Chief Police Officers and a range of Government Departments. We need to scrutinise the business cases and to make sure that we get the figures right.

James Brokenshire: I thank the Minister for his patience in giving way so readily, which I know is his custom. To what extent do the figures on force amalgamations involve the British Transport police? I recognise that the British Transport police are resourced from a different funding stream, but the savings and amalgamations that the Minister refers to could take into account their amalgamation into existing forces. To what extent are they included in the figures and the financing?

Paul Goggins: Nothing that I have said today, or that my right hon. Friend the Home Secretary has said in his written statement to the House today, takes account of the British Transport police and their funding. However, in operational terms it is clearly important that they be part of the wider police family—which they of course are, as indeed are many others. We are trying to place great emphasis in our policing policy on the fact that, in a sense, everybody is part of that family and has a role to play. But nothing that I am announcing this afternoon bears on the funding or financing of the British Transport police.
	As I have pointed out, we have set aside some £125 million of police capital grant over the next two years to support forces committing to early amalgamation. This will be allocated in the light of emerging pressures, as authorities coalesce into new structures. As I have emphasised, we will also look to authorities to reshape their existing investments so that they reflect the new structure, and to reap the benefit of future efficiency savings in making their own investments.

Alan Beith: The Minister has not clarified the position on precept equalisation, and the question is: why should council tax payers in Northumbria, who have a police force that meets the Government's criteria, have their precept raised to a level similar to that applying to forces that are being compulsorily amalgamated because they do not meet those criteria?

Paul Goggins: What matters is that the right hon. Gentleman's constituents, my constituents and all our constituents have effective policing. What does that mean? It means policing that can cope with the threats of terrorism and organised crime—as well, of course, as providing neighbourhood policing. As I have acknowledged, as we bring authorities together there will be different levels of precept. There needs to be a process by which those precept levels are merged into one level, but over a period of time. I can reassure the right hon. Gentleman that my right hon. Friend the Home Secretary has established a working group to look at the fine detail of that process, to ensure that it is used fairly and not as a blunt instrument, which would clearly be unfair. Officials are working on the details, which will be shared with him and other Members as and when such information becomes available.
	The significant development in the threat from international terrorism and the consequent increase in the funding of counter-terrorism in recent years has led us to focus on the best way of ensuring effective funding for this vital work. Following consultation, we decided to consolidate existing funding streams for countering terrorism and domestic extremism, which were a mix of specific grants and general grant. Following consultation with key stakeholders, including ACPO, we have created a new specific grant for counter-terrorism and other national security priorities. The counter-terrorism fund comprises £213 million for dedicated security posts, which is transferred from police grant; existing specific grants for counter-terrorism, totalling £96 million in resource and £8 million in capital each year; and the transfer of £50 million from formula grant to specific grant for the relevant part of the special funding for the Metropolitan Police Authority. In addition, on 25 January the Home Secretary announced substantial additional police service funding specifically for counter-terrorism and dealing with domestic extremism. This comes to some £63 million in revenue and £30 million in capital in 2006–07, rising to £110 million in revenue and £35 million in capital in 2007–08.
	In drawing my remarks to a conclusion, I would like to mention a number of additional points about the overall police funding settlement for 2006–07. For several years, the Home Secretary has provided additional funding to ensure that Welsh police authorities receive at least a minimum grant increase in line with English authorities. For the coming two years, we have adjusted the Home Office police grant for Welsh police authorities to maintain consistency with the English. That additional support will total £9.3 million next year for Dyfed-Powys, Gwent and North Wales police authorities.
	Police authorities will continue to receive funding for specific programmes on top of the general grant. We have tried to minimise the specific grant, thereby maximising the general grant so that police authorities can direct funds at their discretion, but there are still a number of areas in which we want to highlight particular funds. The crime fighting fund was mentioned earlier, and £277 million will be made available to forces in 2006–07 to continue to support the costs of officers recruited through the CFF. A number of forces have asked for greater flexibility, and that fund has been extremely successful in reversing the previous decline in the number of police officers. Strength has grown to historically high levels, we have invested heavily over the past few years to support that growth, and we remain committed to maintaining high numbers.
	Neighbourhood policing teams will be rolled out across the country over the next two years and uniformed police officers will play an increasingly key role in those teams. Through the front-line policing measure, we expect to see more of them released from back-office duties into front-line operation as we reduce levels of bureaucracy and put the freed up resource on to the front line. Forces should, of course, determine the right mix of personnel for their own work force. Decisions on police officer strength should be taken by authorities, not by the Government. There will be greater flexibility for most forces during 2005–06 and we look forward to seeing what further flexibility can be offered in 2006–07.
	Most of the funding for community support officers will come from the neighbourhood policing fund. In the year of recruitment it will meet 100 per cent. of salary and direct costs, subject to a cap, and a fixed sum of £2,500 per recruit will also be payable towards start-up costs. Thereafter, funding will be at 75 per cent., and with such support we expect CSO numbers to reach 24,000 in 2008.
	Some authorities have expressed concern about having to find some of the funding required for their CSOs, but the Home Office should not be the only source of funding. Community safety is an outcome shared with many partners; other central funding streams, local government, business and other organisations all have an interest. We shall shortly publish some guidance and examples of good practice to help authorities to secure match funding, and any surplus resources secured in this way may be spent as the force sees fit, so long as they are spent on neighbourhood policing.

Michael Fabricant: Is the Minister saying that CSOs should be partly funded by private businesses?

Paul Goggins: I am saying that we are about to publish some guidance about ways in which others who wish to contribute to the funding of CSOs will be able to do so. That is not an enforced measure, but one that will allow businesses or other public authorities to put in resources to make sure that our communities are made more secure. That is not being forced on people; it is something that they want to do, and we will provide good examples and guidance to help them do it as effectively as possible.
	In 2006–07, the fourth year of the basic command unit fund, £50 million will again be provided for basic command units, which are at the forefront of local policing. The grant will be targeted towards forces with BCUs in high-crime areas to help reduce crime, in partnership with crime and disorder reduction partnerships. All forces in England and Wales will continue to receive a share of the grant and BCU commanders will have discretion locally to pool their BCU allocations with the new safer and stronger communities fund.
	A capital grant of £250 million will be available in 2006–07 to support police capital programmes. That is an increase of £25 million over 2005–06, and it includes provision of £50 million, to which I have already referred, to fund police force restructuring. Forces were notified of capital allocations for next year on 13 January, earlier than in the past three years, which gives authorities more time to take allocations into account when setting final budgets.
	We have considered fully the written representations received in response to the provisional funding settlement. The settlement is a good one and builds on sustained investment since 2000–01. Our proposals will ensure that all forces in England and Wales receive a fair share of resources next year at a time of radical restructuring. I believe that we have struck the right balance, and I commend the police grant reports to the House.

Nick Herbert: I welcome the Minister's announcement that the grants will be made over a two-year period, which will help police authorities to plan, something for which my predecessor, my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell), called two years ago, as the Minister may be aware. Given the amount of the settlement, police authorities will certainly need help.
	The Minister says that the settlement is generous, but the truth is that the Home Office is giving police forces less money than at the 2001 general election. In this financial year, 2005–06, the Home Office general grant for police expenditure is £4,574 million, which, adjusted for inflation, is less than the £5,094 million given to police forces in 2001–02. I am happy to concede that there will be an increase in the grant over the next two years, but funding will still be lower in 2007–08 than at the 2001 election, when the Government promised that police funding would rise.

Michael Fabricant: Does my hon. Friend agree that the funding pressure will be exacerbated by—in some instances, forced—police mergers? The Minister talked about the provision of an extra £125 million to finance those mergers, yet some estimates are that it will cost as much as £550 million, so there will be a huge shortfall. Will not that make the situation even worse?

Nick Herbert: My hon. Friend is right—the costs of amalgamation will increase the pressures that police authorities will already face as a result of the settlement.

Crispin Blunt: I am grateful to my hon. Friend for giving the House the figures for 2001. That was the end of the Conservative Administration's three-year spending plan, which the Government took on in 1997. In fact, the Government's spending has fallen away from the plans they inherited in 1997 and stuck to for their first three years in office.

Nick Herbert: My hon. Friend is right. The burden has actually been met by local tax payers. As my hon. Friend the Member for Lichfield (Michael Fabricant) suggested, when amalgamations are taken into account, we can see that the real burden of police spending has not been properly quantified. It is being met by council tax payers.
	When the Government came to power in 1997, £932 million was being raised for police forces by councils through the local police precept. Today, that figure is £2,335 million—two and a half times as much. In 1997, nearly 85 per cent. of police forces' gross revenue expenditure was financed by the Government. In 2004–05, the latest year for which figures are available, central Government's contribution has fallen to significantly less than 70 per cent. Meanwhile, the amount of police expenditure financed through council tax has almost doubled in real terms since the Government came to power. Council tax now pays for more than a fifth of police force spending, compared with just a ninth in 1996–97.
	The Government never cease to boast of the investment, by which they mostly mean spending, that they have put into policing. In her statement on 5 December, announcing the draft grant figures, the Minister for Policing, Security and Community Safety said:
	"The Government have put unprecedented levels of investment into the Police Service in England and Wales in recent years."—[Official Report, 5 December 2005; Vol. 440, c. 68WS.]
	However, as so often, the Government have raised the money by stealth from council tax payers. Every time that the Government seek to claim the credit for putting more police on the streets, we need to remind local people that they, not the Chancellor, have largely footed the bill.
	Today, the Home Secretary announced in a written answer, not a statement to the House, that he intended to proceed with police force amalgamations. As my hon. Friend the Member for North Shropshire (Mr. Paterson) pointed out on a point of order, that is an extraordinary way to announce something that has major constitutional implications, as Her Majesty's inspector of constabulary conceded in his report. The allocations for capital results proposed in the December statement already show a fall in real terms in the second year. Moreover, the Home Secretary has announced that £125 million of that funding will be used to meet the costs of police amalgamations, so resources that should be spent on improvements to policing will be used to pay for management consultants, merged IT systems and new headquarters.

Andrew Selous: Does my hon. Friend share the analysis put to Bedfordshire MPs last night, by those members of Bedfordshire police authority who are responsible for finance, that if significant merger costs are imposed on Bedfordshire police but not picked up by the Government, if the police precept is capped, and because the savings will be made some years ahead, it will mean in practice that that will affect the number of police officers on the ground over the next few years?

Nick Herbert: That analysis is absolutely correct. In the absence of the Government funding the costs of amalgamation, only two things are possible: either the police precept must increase or services must be cut. As the Government are saying that the precept cannot be increased—it will be capped—the result is that front-line services will be cut, unless new funding is provided to meet those costs.
	As we pointed out last week, the Association of Police Authorities has quantified the cost of amalgamations at £525 million, based on the detailed calculations of each police authority. After the Home Secretary's provision of £125 million, that leaves a gap of £400 million, as was made clear by my hon. Friend the Member for Lichfield. The Home Secretary is providing less than a quarter of the amount needed to fund amalgamation. How will that be financed? Either more than two thirds of the entire capital provision for police forces, which the Minister has just announced, will be spent on amalgamations or, once again, local taxpayers must foot the bill.
	The Minister has said that police authorities can finance amalgamations with prudent borrowing. We might have expected that suggestion. The Government are not exactly averse to borrowing, however imprudent doing so might be, but whether or not authorities borrow the cost will be met ultimately by local tax payers. Assuming that police authorities do not cut services, the average police precept would rise by 21 per cent. to fund the amalgamations. That would involve rises of between £15 and £37 on the average council tax bill on a band D property. That comes on top of already planned increases, which we will no doubt hear about later.

Michael Fabricant: I wonder whether my hon. Friend would be surprised to learn that at a recent meeting with the Staffordshire police authority and with the chief constable—John Giffard, who is in some ways the architect of all the mergers—a case was put for the merger for Staffordshire. However, of the 11 Members of Parliament present—in Staffordshire nine are Labour, only three are Conservative—

Kevin Brennan: That makes 12.

Michael Fabricant: All 11 Members of Parliament present—there are 12 Staffordshire MPs of which nine are Labour and three Conservative—only two MPs were in favour of the merger. All the rest felt, as my hon. Friend says, that a merger would be not only inefficient, but a burden on the council tax in Staffordshire.

Nick Herbert: My hon. Friend is right about the scale of opposition to the merger in the west midlands, not just from hon. Members on both sides of the House, but from local people as well. In opinion poll after opinion poll across the country, local people have emphatically rejected amalgamations.
	As I said, the police precept will have to rise by 21 per cent. to fund the amalgamations. The issue is how that fits in with the Minister's insistence that council tax rises should be minimised or else the Government will take capping action, to which my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) referred. On the one hand, the Government are landing police authorities with a huge bill for a restructuring that most of them do not want, but for which the Government refuse to pay; on the other, they are threatening capping if police authorities try to finance the costs themselves. Police authorities cannot win except by cutting services.
	The Minister for Policing, Security and Community Safety has dismissed the Association of Police Authorities' estimate of the costs. In that case, let us hear the Government's estimates. Today, the Home Secretary announced that he intends to proceed with police force amalgamations in four regions before he has received that assessment of the costs. He is driving the restructuring through, without local consultation, to an unnecessarily tight timetable and with no idea of what the costs might be.
	On the figures of the Association of Police Authorities, the north-east regional force will cost £29.2 million and add more than £30 to Cleveland's council tax bills on band D properties. The three-force option in the north-west will cost £47 million and add £32 to Cumbria's council tax bills. The Welsh national force will cost £59.7 million and add more than £33 to council tax bills in north Wales. The west midlands force, to which my hon. Friend the Member for Lichfield referred, will cost £41.8 million, adding more than £30 to Staffordshire's council tax bills.
	The Home Secretary's written statement this afternoon will cost £175 million—nearly half of the capital provision for next year—and there are still five regions to go, assuming that the Government intend to proceed with amalgamations in those regions, setting aside London.

Geoffrey Clifton-Brown: The chief constable of Gloucestershire has estimated that the south-west amalgamations will cost an estimated £56 million. My hon. Friend can add that to his figure, so we are beginning to get some large sums. Gloucestershire has, I think, the highest police precept, which went up by two thirds—66 per cent.—in the past three years. Does he agree that it would be unacceptable if the people of Gloucestershire, who have made good progress on the Government's "Agenda for Change", are clobbered yet again with a much higher police precept because of the forced amalgamations that no one wants? Indeed, the chief constable and five out of the six Members of Parliament who represent the region are adamant that they do not want it.

Nick Herbert: My hon. Friend is right. The proposed amalgamations are unpopular in the south-west, as they are in the rest of the country. The cost of £175 million was solely for the four regions affected by the Government's announcement today. The total cost will be £525 million. That will have to be met in part by council tax payers in the south-west, including Gloucestershire. It does not deal with the problem raised in interventions on the Minister, to which he did not respond, of the need for precept equalisation, resulting in much higher council tax increases in some police force areas or additional costs if those differences are to be ironed out.

Andrew Pelling: Would it not add insult to injury for many of the larger regions to find themselves paying extra tax, following the Metropolitan police's example of pulling resources towards the more urban, metropolitan areas and away from places such as Gloucestershire and Staffordshire?

Nick Herbert: My hon. Friend is right. One of the great concerns about amalgamations is their impact on policing, particularly in rural areas. There is potential for funds and police officers to be drawn away from the community policing that the public want. If £525 million is to be spent on policing in England and Wales, I believe that the public would want it to go towards ensuring proper policing of our streets to prevent crime.

Geoffrey Clifton-Brown: I want to give my hon. Friend and the House a stark example of what he has just been saying. On a Friday night, one patrol car patrols 500 square miles of the north Cotswolds. That is half the area of the Metropolitan police, which probably has 10,000 police on duty. That is the difference between some of our remote, rural areas and most inner-city areas.

Nick Herbert: Again, my hon. Friend is right. The areas created by some of the regional forces are huge— some thousands of square miles—which raises serious issues of accountability as well as adding to the difficulty in forces of deploying officers across such vast areas.
	Two weeks ago the Prime Minister said that it was
	"not a question of forcing"—[Official Report, 25 January 2006; Vol. 441, c. 1426.]—
	amalgamations through, yet the Home Secretary has dismissed out of hand the cheaper and less disruptive option of forces sharing services, in spite of the fact that that has been supported by the Association of Police Authorities and endorsed by the Prime Minister. The Minister mentioned the savings that could accrue through amalgamation, but he will know that the O'Connor report estimated that at only £70 million a year, and there were no supporting calculations to indicate how those savings might be arrived at.
	The fact that North Wales police are not being allowed to consider merging with an English force, even though crime patterns would dictate that option, betrays the Government's true regional political agenda. The creation of a west midlands force announced in the statement today is not a merger at all. It is a hostile takeover of West Mercia police, which is one of the top-ranked forces in the country and wants to stand alone.
	Before the effect of the amalgamations was taken into account, the Association of Police Authorities and ACPO expressed concern about the levels of funding being provided, as announced today. They estimate a revenue gap of £250 million. That is based on detailed research carried out by police authority treasurers, which shows that the service needs annual funding increases of at least 6 per cent. in 2006–07 and 2007–08, excluding any new costs of dealing with counter-terrorism, which the whole House would support, and police force amalgamations. The Association of Police Authorities and ACPO identified the cost pressures in a joint statement as follows:
	"The need to maintain the high number of police officers; pay inflation; burdens imposed by new legislation and Government initiatives; anti-terrorism costs; new statutory and policy responsibilities for the police; and delivering police reform, including the neighbourhood policing initiative, which will bring with it very significant costs".
	Dr. Tim Brain, the chief constable of Gloucestershire and chairman of ACPO's financial committee, said:
	"Some authorities may face some real difficulties next year. Many Police Authorities held down council tax increases last year, by using their reserves. They will be under pressure to hold down council tax rises again, but this year they will have far smaller reserves upon which to draw. The level of reserves left available may not be sufficient to cover the gap that is emerging.
	The Government's intention is for average council tax increases to be limited to less than 5 per cent. otherwise 'capping' action may be taken. This will seriously affect the options available to bridge the funding gap and severe cuts in service look possible. Unlike other branches of local government, we do not have the option of off setting grant by increasing fees and charges for specific services. Some Police Authorities are going to be faced with difficult choices, and for some cuts in service levels may be the only outcome."
	Police forces have already made significant efficiency gains and, indeed, they have been congratulated by the Chancellor on leading the way. However, the comments of the chief constable of Gloucestershire have been echoed across the country, as the Minister will know, by a number of police forces and authorities that are concerned about the settlement. My own authority of Sussex said:
	"Sussex police authority's deeply disappointing . . . grant settlement, finalised last month, means that hard choices are required if the level of council tax is to be within the average 5 per cent. capping limits that have now been set by Ministers. Given the current funding, it will be increasingly difficult to set low council tax increases without impacting on front-line services."
	That was echoed by the deputy chief constable of Sussex, who will shortly become chief constable:
	"We have already planned to deliver some £6.8 million of efficiency savings in 2006–07 and 2007–08, but the final settlement will require further savings of £1.9 million in order to constrain the necessary precept increase below 5 per cent."
	Despite rightly making the savings that the Government have urged them to make, police authorities and forces still face financial difficulties.
	Lincolnshire police authority's treasurer and clerk, Mr. Roger Buttery, said that the force is facing a £4 million shortfall and may have to make some police staff redundant. If that happened, police officers would have to fill staff positions. Mr. Buttery told the Police Review that the authority was considering completing only emergency property maintenance and might have to pull out of a successful community partnership with the local council and health authority. Derbyshire police reported that their central Government grant is to be increased by only 3.4 per cent., falling short of the £9.6 million extra that the authority believes is needed to meet current service pressures. Mr. Nigel Thomas, the treasurer of the North Wales police authority, compared its 3.7 per cent. funding increase with the 6.4 per cent. that it needed "just to stand still".
	The problem faced by those police authorities stems from the additional costs loaded on to police forces. A major contributor to those additional costs is the ever- increasing central direction imposed by the Government. The police have been subjected to an ever-tighter central grip, with a plethora of targets, plans and agencies designed to regulate and direct them. There is a national policing plan and a police performance assessment framework, as well as public service agreements. Police forces are statutorily required to produce strategic plans and they are overseen by Her Majesty's inspectorate of constabulary, the Audit Commission and the Government's police standards unit. There is a national centre for policing excellence, which shortly will be subsumed by a new national policing improvement agency as a result of the Police and Justice Bill, which has been laid before the House.
	The centralisation of the police raises a number of issues in the context of the Government's proposals. First, on the cost of the centralised units, what will be the cost of the national policing improvement agency? Indeed, what is the cost of the police standards unit? Central spending on those units has increased substantially since they were introduced by the Government. Secondly, we must consider the cost of the bureaucracy with which the police must deal, and thirdly, with the opportunity cost resulting from the fact that police officers are not on our streets. It is well known that police officers, according to the Home Office's own figures, spend less than one fifth of their time on the beat, and that it takes six and a half hours to process an arrest.

Michael Fabricant: Is my hon. Friend aware that since 1997 the cells at Lichfield police station have been closed? If, on a Friday or Saturday night, young farmers and soldiers from the barracks or, far more likely, yobbos from Birmingham come to Lichfield and cause trouble, with arrests being made, police officers have to take the arrested individuals to Tamworth, deal with them there and come back again, which takes them away from the streets for a good two hours or more. As there are hardly any police available in Lichfield anyway on a Friday or Saturday night, that effectively means that we have virtually no policing for that period.

Nick Herbert: That is a serious issue, particularly in rural areas where the distances to be travelled can be significant. If a police officer makes an arrest early in his shift he is likely to be taken off the beat for a period of hours. We must address that serious issue if we are to increase the presence of the police on the streets, which is what the public want.

Andrew Pelling: The issue of accountability is obviously important. Does my hon. Friend agree that the diffuse nature of accountability in the Metropolitan Police Service is further complicated by the accountability of the commissioner to the Mayor and the London assembly, the assembly's budget committee and the Home Secretary? Accountability is valuable in principle, but such diffusion of accountability can lead to inefficiencies in our police service.

Nick Herbert: I agree, and I shall come on to the issue of accountability, which is particularly problematic in London for reasons that the House will understand. The Metropolitan Police Commissioner has national policing duties and is appointed by the Home Secretary. He is accountable locally, however, to the Metropolitan Police Authority and the Mayor. As a result of being accountable to so many bodies, his true accountability to local people is considerably weakened, and that issue must be addressed as it is a problem not just for the system but for the commissioner. The confusion of accountability to the MPA and the Mayor will be only partly addressed by the changes that have been announced.
	First, therefore, central direction has the consequence of imposing costs. Secondly, initiatives announced by the Government tend to expire, the best example being their street crime initiative, which was set up by the Prime Minister to target the 10 worst-hit areas. It temporarily succeeded in reducing street crime between 2002, when it was initiated, and 2005. Since its expiry, however, Home Office statistics for July to September 2005 show that the number of robberies recorded by the police has increased by 11 per cent. to 23,500, following a 4 per cent. rise in robberies in the previous quarter. In London, half of street crimes last year involved the theft of mobile phones. Recorded gun crime rose nationally by 1 per cent. to 11,000 incidents, and the number of serious injuries from gun crimes rose by 18 per cent. to 470. Recorded drugs crimes rose by nearly one fifth to 41,100, and violent crime recorded by the police rose by 4 per cent. to 316,000 incidents in the three months to September. All the prime ministerial energy that was directed at securing the initiative and the resources that it received expired and, with them, its success in temporarily reducing crime.
	It is not just ministerial effort that can expire with central direction, but funding. The Minister mentioned community support officers.

Geoffrey Clifton-Brown: Before my hon. Friend moves on from the very important statistics that he cited, may I ask whether he is aware that in many of those categories less than a fifth of all crimes are detected?

Nick Herbert: My hon. Friend is correct. One of the problems that the Metropolitan police face is a relatively low detection rate. Detection rates nationally are poor and have fallen significantly since the 1980s. The fact that only a fifth of crimes are detected shows that resourcing alone is not sufficient to drive up police performance.
	The Minister announced additional funding for community support officers. The problem, as he conceded, is that after the first year following their recruitment, the police must fund 25 per cent. of the cost. As a consequence, police forces and authorities have to turn to external agencies—in particular, local authorities—to ask for help. The Minister seemed to suggest that was a good thing. The assistant chief constable of Sussex has written to local authorities, pointing out that Sussex police employs more police community support officers than another shire force, which I welcome. There are 250 of them deployed across the Sussex police force.
	However, Mr. Yeo pointed out:
	"PCSOs are funded by the Home Office. The funding is tapered and linked to tranches of recruitment over the past 3 three years. Funding for the first tranche runs out in March 2006 and because of capping restrictions we cannot rely on the Police Authority to meet the shortfall. Whilst solutions are being sought, the most obvious is to invite town and parish councils to contribute on behalf of their communities."
	That means that there will be further pressure on local authorities to fund PCSOs, resulting in further pressure on council tax. Mr. Yeo continued:
	"The full annual cost of employing a PCSO is £27,000—towns and some larger parishes may wish to enter into an agreement with the police in their own right to fund 50 per cent. of a PCSO or negotiate for dedicated additional cover for their area. It is recognised that this is not a realistic option for very small councils and one solution could be clustering, where a number of councils in close proximity arrange to share the cost using an equitable formula."

James Gray: Does my hon. Friend agree that the problem with the arrangement he is describing is that the decision about whether to have PCSOs becomes an acutely political one? Parish and town councils, which might well have other pressures on their budgets, will annually take political decisions about whether to continue with PCSOs, so their employment might last for one year, two years, or who knows how long. Is that not a fundamentally unsatisfactory way to run the scheme?

Nick Herbert: I agree. The problem is that the initiatives announced by the Government are not fully funded. When funding expires, support for PCSOs may not be universal within a police authority, and local authorities faced with alternative pressures have hard choices to make. That calls into question the neighbourhood policing programme, which commands great public support and which relies on the introduction of PCSOs across the country.
	As part of the drive to increase the number of PCSOs, the Home Office pledged to introduce 199 PCSOs in the Bedfordshire and Luton area by 2008, but because of the funding shortfall Bedfordshire police approached Biggleswade town council, a small council, to see whether it was willing to fund extra officers in the town. The mayor of Biggleswade, Wendy Smith, commented:
	"It's very disappointing to be told in one breath we're going to give you 199 PCSOs in three years, but in the next breath be told you're going to have to pay £6,000.
	For town and parish councils, £6,000 is a lot of money. It could put another 1 per cent. on the rates. We can't just keep putting the rates up."
	She went on to say that on the whole there was
	"great disappointment and concern that we won't be able to find the sort of money required to ensure Biggleswade is policed adequately."

James Brokenshire: Does my hon. Friend agree that there are parallels with the neighbourhood warden scheme that was part-funded by the Home Office and later withdrawn? I am reminded of my area, where a neighbourhood warden scheme was established in conjunction with the local authority and provided important support in the community. As soon as it was grounded, funding was removed and the wardens were withdrawn. Is there a risk that that could happen to community support officers too?

Nick Herbert: There is plainly a risk that that could happen. We welcome the extension of the police family. The presence of uniformed officers who are not full-time police officers—community support officers or neighbourhood wardens—has been welcomed in many parts of the country. However, against a background of tight financial settlements, will police authorities and local authorities continue to be able to hire the uniformed officers whom the public value?

Andrew Pelling: Can that be seen on a larger scale in the context of the debate in London on the council tax precept? It is difficult to argue against an increase in PCSO and police numbers, and I would support such an increase, but the problem arises when it comes in combination with other increases, such as the Olympic precept, making a 16.5 per cent. increase. Does my hon. Friend agree that there is a need for close scrutiny of the value for money that will be secured from those PCSO teams?

Nick Herbert: I will not be drawn into commenting on the precept to fund the Olympics, but it is true that the public will need to be reassured that PCSOs provide value for money. In that respect, the latest Home Office-sponsored official assessment of PCSOs, which indicated that there was no evidence that they reduced antisocial behaviour in the areas where they operate, by comparison with areas where they did not operate, is, I expect, a source of concern in all parts of the House. We do not wish the deployment of PCSOs to be undermined, but it is important to demonstrate that they provide value for money for local communities and are doing the job that they are employed to do.
	The third way in which increasing central direction will be problematic for police forces is that it undermines the freedom of chief constables to innovate. The existing structure does not allow chief constables to manage their forces flexibly. There are many police authorities and chief constables who would prefer to take different decisions about whether or not to hire PCSOs or police officers, but they are told by the Government that money is available only for certain purposes, and the substantial sums that have been made available for PCSOs are ring-fenced for that purpose. For chief constables who might decide instead to take on fully-fledged police officers, it is not possible to do so.
	If we are to ask police authorities and police forces to continue to make efficiency savings as they have done in recent years, and to improve on those savings, we will have to give chief constables more flexibility in managing their work forces. That is not an issue that the Government have been willing to address.

Michael Fabricant: My hon. Friend supports the introduction of PCSOs, and I agree that we would rather have them than have no police presence at all. However, what would he say to my constituent who is a serving police officer in Staffordshire police—I had better not reveal his name—and who says that PCSOs are not real police officers because they have no powers of arrest, and besides if they were any good they would be policemen instead?

Nick Herbert: I would say to my hon. Friend and to the person who made that comment that PCSOs can perform a valuable role in the community in augmenting a uniformed presence and in helping to prevent crime. The absence of their power of arrest, which is controversial, can help them to remain on the streets in their neighbourhoods, which is what is wanted of them, without being detained in police stations for prolonged periods processing arrests. PCSOs also provide a recruiting ground for people who may wish to move on to become fully fledged police officers; and they have succeeded in recruiting from a much broader spectrum of the community, particularly among ethnic minorities, than our regular police force.
	For all those reasons, we believe that PCSOs are a welcome development. Indeed, we would like to see an extension of the principle of the police family to provide more wardens and local authority guardians of the kind successfully pioneered by Westminster city council. However, that will depend on funding being available for such positions and, equally, on resources not being wasted on unnecessary amalgamations for no real gain.

Andrew Pelling: Is not my hon. Friend's point about the good calibre of many PCSOs supported by the fact that in the Metropolitan police service 230 of them have gone on to become police officers? Does he agree that there is concern about the speed with which PCSO teams are put together and about the recruitment of the best quality sergeants, who will have a difficult task in managing new members of staff as PCSO teams are put together over a two-year period?

Nick Herbert: Those matters will need to be addressed in a proper assessment of the role of PCSOs. That should be conducted against the background of a general acceptance of the principle of having a more flexible policing structure, with a uniformed presence that does not just mean a regular police officer, but can also mean the extended police family.
	Chief constables' ability to innovate will be important if we are to see the efficiency gains necessary to ensure that police forces continue to deliver against difficult financial settlements, such as the one that the Government have announced. There are good examples of local forces showing such innovation and modernising their work forces in a way that drives up productivity substantially. In relation to offender management and custody, Northumbria police have introduced an integrated criminal justice process by developing a range of complementary police support officer roles. A 7 per cent. increase in constable strength at the front line was achieved by releasing police officers from custody and associated duties. Performance has improved, with higher file quality and timeliness; custody-related complaints have fallen by half; and detection rates, which have been a source of concern nationally, have increased by up to 14 per cent.
	Similarly, in Surrey the police CID office has been transformed to improve investigation. It was reorganised in order properly to meet public expectations, and the mix of staff was altered to include 60 per cent. of police support officers working with constables in teams led by advance detectives, which has delivered a better service. It has investigated 35 per cent. more crime, halved investigative delays, and tripled follow-up with victims. Moreover, it has improved results. Twenty-five per cent. more offenders are caught, with greater efficiency—in other words, at a quarter less cost. The use of support offices to perform roles that uniformed officers had undertaken can dramatically increase productivity.
	Humberside police have reconfigured their major incident rooms by employing police support officers in key roles. That has improved quality, created increased capacity and almost halved costs, which have been reduced by 43 per cent. West Yorkshire police have integrated their investigative support officers and investigation officers into their homicide and major incident teams, again increasing capacity and significantly reducing overall costs.
	Some senior police officers estimate that the savings achieved as a result of such work force modernisation could be as much as 20 per cent. It would take a very substantial increase in resources to match that level of improvement. That demonstrates that the input-led approach to policing, which has often been taken, is no longer appropriate when considering their performance. The point, surely, is not that spending on the police has increased: what should matter to us is outcomes. The competing claims that are made for putting police officers on the streets mean nothing if they will not actually be on the streets because they are tied up doing unnecessary jobs.
	If we are properly to examine the performance of the police and work out whether it is possible for them to improve their efficiency and make productivity gains—I remind the House that the success of policing under the funding arrangements that the Minister announced depends substantially on significant continuing efficiency gains—in fairness to them, and so that the public can judge the effectiveness of spending on the police and of additional spending, it will be necessary to have more robust measures of police performance and of crime.
	On the measure of recorded crime that the Government no longer like, one crime is committed for every 38 people living in England and Wales and 10 crimes are committed for every police officer. The Government prefer the British crime survey, but that still shows, comparing the levels of extra resources with the outputs of the service, that productivity has fallen. The survey showed falls in crime in the years before steep rises in police funding, which were of course partly borne by the local taxpayer. The rate of the fall in crime as measured by the survey has been unaffected by spending increases since 1999–2000. The arrest rate has fallen slightly since those spending increases, as have detection rates. The number of undetected crimes has reached more than 4.1 million—about a quarter of all crimes committed.
	I therefore welcome the Home Secretary's announcement that the way in which crime is measured will be independently reviewed. We are co-operating with the review team that he announced. That review should go alongside a simpler performance assessment framework so that the police can be properly held to account by the public.

Owen Paterson: I apologise to you, Mr. Deputy Speaker, and to the rest of the House. I had to leave shortly after the beginning of the debate because there was considerable anger locally about the statement on police reorganisation, and I had to address that outside the House.
	I go back to the point made by my hon. Friend the Member for Arundel and South Downs (Nick Herbert). Is he aware of the recent study by the Federation of Small Businesses showing that nearly 60 per cent. of businesses questioned were victims of crime during the survey period but that over a quarter did not report the crime because they felt that the police would not be able to catch the criminals? The federation believes that there is massive under-reporting. As the Minister seems to be part of the taskforce with the Home Secretary, will he make sure that he involves the Federation of Small Businesses?

Nick Herbert: I am sure that the Minister has taken note of that. The prevalence of property crime is one of the significant omissions from the British crime survey; I hope that the views of the Federation of Small Businesses will be taken into account.
	There must be a measure of crime on which the public, the police and the House can agree and in which they can have confidence. Only then will we be able to judge how successful increasing resources for the police has been and to hold the police to account for their performance. We believe that, in place of the Government's increasingly central direction of the police, there should be the local accountability referred to earlier, and that the operational independence of the police, which is so important, should be preserved.
	The pattern of the announcements on police grants in successive years is this: additional resources, the burden of which falls increasingly on the local taxpayer, combined with an ever-tighter central grip on the police. There is an alternative agenda, which constitutes being serious about police reform and work force modernisation and focusing on that as a priority, rather than concentrating on uncosted amalgamations that raise serious issues of accountability and on which local people have not been properly consulted.
	That agenda of police force modernisation should be combined with the enhancement of local accountability that I mentioned. That will deliver what the public want: not only the security that they seek, to which Members on both sides of the House subscribe, to deal with very serious crime and the threat of terrorism, but a tackling of the volume crime that touches people's lives daily. People want a police presence on their street; they want to see that the police are not only detecting crime and bringing offenders to justice, but preventing crime from happening in the first place.
	Sir Robert Peel's ninth principle of policing stated that the test of its effectiveness is the absence of crime and disorder—and not, therefore, any activity on the part of the Government or police forces. The extra resources announced today have still given rise to serious concerns among local police authorities and forces about their ability to cope, given the level of the funding settlement. It is essential that those resources are matched with better police performance. Police reform, as well as police funding, should be the Government's priority.

Paul Truswell: What I am about to say will not surprise my hon. Friend the Minister. Our previous debate on issues relating to West Yorkshire dwelt mainly on reorganisation. I make no apology for repeating some of the funding issues to drive the message home.
	As my hon. Friend knows, thanks to the Government's funding of record levels of police officers and the introduction of PCSOs in West Yorkshire, volume crime levels there have been driven down substantially. Pudsey and Weetwood division in my constituency has been at the forefront; in the last full year for which figures are available—2004–05—8,383 fewer crimes were committed there, a fall of 19 per cent. Figures for burglary and robbery and for theft of and from motor vehicles fell by even more, and the latest figures for the current year are showing that same downward trend.
	Despite those encouraging figures, we still need more resources to maintain the downward trend on volume crime and make a much greater impact on antisocial behaviour and violent crime. We need to sustain that sort of progress, but we also need to meet major challenges. As I have said before to my hon. Friend, inOctober 2005 Her Majesty's inspectorate of constabulary reported improvements across the board for West Yorkshire police; there was an excellent score for investigating crime, and good ratings for reducing crime, promoting safety and the effective use of resources.
	More worryingly, the force's ratings for local policing and dealing with the public, although now improving, were still far short of what the people of west Yorkshire rightly demand. For example, the handling of calls is a continuing source of concern to my constituents. I regret to tell my hon. Friend that this latest funding round will not enable the progress that I have described to be sustained or the challenges that I have mentioned to be met.
	The force's latest estimate of the budget increase needed next year is £17 million higher than the funding available with a precept increase of 5 per cent. Admittedly, that includes growth of funding for issues such as counter-terrorism, quality of service commitment and PCSO funding. However, even without that desirable growth, the funding gap is substantial, and that should not be the case. The funding formula has been revised in a way that reflects policing needs across west Yorkshire, and is much more generous than the funding formulae imposed by the Conservative party that benefited the south at the expense of the north.

David Heath: Parts of the south.

Paul Truswell: I accept that slight qualification.
	The notional allocation from the full application of the formula would have been about £320 million, sufficient to fund the West Yorkshire force's base budget   without any significant increase in precept. Unfortunately, my hon. Friend and his colleagues have seen fit to set a floor of 3.2 per cent. As he rightly said, that is a virtually flat-rate increase, as in 2005–05, despite assurances—of which I would remind him if he were listening—that the Government would continue to move towards formula-driven allocations.
	Once again, we in west Yorkshire are made to feel as if we are going cap in hand to plead with our bank manager to allow us to withdraw money from our own account. West Yorkshire police loses £14.2 million in 2006–07 as a result of that approach, and receives an overall increase in the general grant of only 3.4 per cent. Figures for 2007–08 show an ongoing loss of £14.7 million. That is the third largest clawback of any force in the country and represents 10 per cent. of the total amount needed to support forces below the floor. It is ironic that three of the forces most penalised by that approach contain, like west Yorkshire, concentrations of deprived populations with particular needs for protective services.
	My hon. Friend and his colleagues know what the West Yorkshire force needs. The formula reflects those needs, but the funding simply does not. My hon. Friend made reference to the changes in funding arrangements for financing pensions; originally, the calculation was that the West Yorkshire force would lose something like £2 million as part of that process. I am pleased to hear what my hon. Friend has said, but would be grateful if he wrote to me to confirm that that £2 million funding gap over the pension arrangements initially calculated for the West Yorkshire force has been addressed by the measures that he mentioned today.
	If West Yorkshire police authority is to set a budget within the capping constraints that does not seriously impact on service provision and officer strength, extra support will be needed, either through general or specific grant allocations. Obviously, I would like my hon. Friend and his colleagues to review and revise the formula funding elements and the impact of the pension arrangements to which I have just referred. However, there are several discretionary areas, which we have explored before, through which the West Yorkshire force could be assisted without making a special case in formula funding terms.
	My hon. Friend will be aware of the excellent work done by West Yorkshire in the wake of the London bombings and their unfortunate connection with Leeds. The Home Office is considering the claim put in by West Yorkshire, and the current estimate of the additional cost of reacting to the challenges following the London bombings is about £5.9 million. Meeting those costs would obviously go some way towards filling the funding gap. The force has also submitted a bid through ACPO's terrorism and allied matters group for funding for a local counter-terrorism unit, similar to the one that operates in the west midlands. That bid is still outstanding and is the subject of a great deal of to-ing and fro-ing between Home Office officials and the force. Any influence that my hon. Friend can bring to bear on resolving that issue, and meeting that bill, would be gratefully received.
	At our last meeting, I referred to the designation of Leeds-Bradford airport, and my hon. Friend kindly wrote to explain that a review was taking place and was due to report in the spring. I hope that any recommendations on funding West Yorkshire police, particularly my own division of Pudsey and Weetwood, from which come many of the abstractions necessary to police the airport, are looked on favourably.
	To ensure that as many hon. Members as possible get an opportunity to speak, I shall conclude. On the basis of the points made today and previously to my right hon. and hon. Friends in the Home Office, I hope that they will understand why people in west Yorkshire feel a bit like the Bisto urchins; we can smell the gravy, but we cannot quite get a taste of it. I hope that the Minister will be able to address my points, although not necessarily in his summing-up speech as I should be grateful if he wrote to me in detail about some of the issues I have raised.

Lynne Featherstone: It would have been helpful if the Government's report had incorporated all the funding in support of the fight against crime. If so, we would know exactly what the Government are doing in the round and where the grant to the police authorities will be affected by movements elsewhere in their funding priorities. We have heard some of the detail today but have not had it before; if we had, we could better have assessed the shortfalls, of which there appear to be some.
	Has the Minister taken into account that when, as he announced, extra funding is provided for security forces and counter-terrorism operations, which fall outside the police grant, there is a knock-on effect for local police, who inevitably see their work loads rising, to some extent, as they service and facilitate those extra activities? Hence, there is a need for extra funding to match that increase, as the local police and security forces often work together.
	I have been in contact, like other Members, with the Association of Police Authorities as well as the Association of Chief Police Officers. Both have expressed serious concern about the grants. As the hon. Member for Arundel and South Downs (Nick Herbert) said, they face a funding gap, in broad terms, of £250 million, which would need an annual funding increase of at least 6 per cent. in 2006–07 and 2007–08. That would put many authorities in extremely difficult positions. They would either face cuts or have to raise council tax at a critical time for the country, a time at which we must support our police and enable them to carry out their job properly.
	Police budgets now include the need to maintain the higher number of police officers we thankfully have. That increase in officers has delivered many benefits in reducing both the fear of crime and crime itself. All parties have welcomed the safer neighbourhood scheme and the return of policing and patrolling at the neighbourhood level. But the real cost will not be adequately funded by the grant in the report, and there must be a danger that police numbers will be reduced as a result.

James Gray: As I understand her premise, the hon. Lady believes that we are satisfied with the level of policing in local areas and on the ground, and are merely concerned about how the grant will pay for them. She has not been to Wiltshire, where we are deeply unhappy about the level of policing. We are not seeing the police on the streets, and this grant will make that worse.

Lynne Featherstone: The hon. Gentleman is quite right. I am not saying that we are satisfied, merely that all parties welcomed the safer neighbourhoods scheme as a means to bring policing back to local areas. Whether it has come back to his area I cannot say; clearly, it has not.
	The real costs will not be adequately funded by the level of grant in the report, and if it is not satisfactory now, it certainly will not be next year. Increasing burdens are imposed by pay inflation, new legislation and Government initiatives, and police authorities are inevitably going to find themselves short of a bob or two—or, indeed, a bobby or two.

Stephen Pound: Stop, stop. The hon. Lady is spoiling us.

Lynne Featherstone: Just a bit of humour.
	The Government have introduced masses of new legislation, with all that that entails in what is expected of the police. There is now the burden, which will constantly increase, of enforcing those new initiatives, whether they be drink banning orders or enforcement matters, such as those on home furnishing companies selling cutlery to people under 18 years old. Also, the change that means all offences are now arrestable will, in itself, create more of a bureaucratic paper chain without, despite all the talk about technology, the on-street technology necessary for a modern police force, so that officers can spend more time on the streets. Even traffic wardens have gizmos that send messages back and forward. There are burdens from alcohol disorder zones, increasing numbers of antisocial behaviour orders, policing the one third of ASBOs that are breached, dispersal zones and new powers brought in under the licensing changes. An endless stream of new duties has been imposed on the police, and those new statutory responsibilities, as well as delivery of police reform, including the neighbourhood policing initiative, bring significant costs.
	Hon. Members will no doubt speak—they already have, to an extent—on behalf of their own police authorities, but it is clear that a significant number of authorities feel that the increase in funding is inadequate and will cause difficulties in fulfilling expectations and keeping up the standards that the public want. They will struggle to meet ongoing cost pressures.
	The Metropolitan Police Authority, on which I served for five years before I came here, is an example. My Liberal Democrat colleagues at the Greater London assembly have consistently asked for more money for London policing, not least because of the considerable extra burden on London caused by national and capital city functions, and so that it does not abstract officers from other areas. I was therefore disappointed to see that the MPA's total revenue grant entitlement had fallen by £1.764 million.
	Under the new grant formula, the Met's entitlement increased by only 1.15 per cent. That is why the Liberal Democrats and the Mayor of London have been arguing about the Mayor's failure to persuade the Government to adopt a distribution formula that would give London its fair share. To avoid extreme changes in one go, the Government have used floors and ceilings. At the time of the consultation, the floor was set with a minimum increase of 3.2 per cent. for every police authority, with a formula entitlement of less than that. Hence, the MPA was due to receive a 3.2 per cent. increase, although its entitlement was only 1.15 per cent. As a result of the consultation, however, the Government adjusted the grant upward for some police authorities. Because the total available does not change, they have reduced the floor to 3.1 per cent., resulting in a reduction for the MPA, which will also apply next year. Even if the allocation were to increase, the authority would not necessarily get more money as a result of the floor.
	We have heard of other grants today, and the Metropolitan Police Service also bid for about £140 million extra but has got around £30 million. It will all go on extra work and staff, so the service will be no better off. The Commissioner of Police of the Metropolis, who I understand has just arrived at the function that I was meant to be hosting, has said to the MPA that what is not funded will not be done. That is serious for London. Another part of the Met's work involves the security services, including MI5. Funding has been increased hugely, but that puts more pressure on the Metropolitan Police Service.
	As for special payments, a report produced about two years ago showed that the MPS costs for the capital's royal and diplomatic protection were up to £45 million a year more than the special payments. Seemingly, despite Mayor Ken coming back into the Labour fold, he has been unable to persuade the Labour Government to recognise the importance of policing to Londoners. Does the Minister agree that the disappointing increase in the grant entitlement to the MPA, of slightly more than 1 per cent., represents either a failure of the Mayor of London to persuade the Government of London's particular needs, or a failure of the Government to understand London's needs?
	I am concerned that the increase in police funding is increasingly being paid for by an increase in council tax. The 6 per cent. increase that the Association of Police Authorities and the Association of Chief Police Officers have termed necessary to meet costs will have to be made up by taking the money out of our pockets through the precept. It was said last year that council tax would have to rise to 12 per cent., but police authorities say that they will have to increase reserves to maintain the capped level. That will not happen two years in a row. In addressing the issues of crime and antisocial behaviour in our communities, the Government have been able to push more and more of the costs on to council tax payers through the precept.
	Police forces now have to decide at what level to set their budget and to what level they want to raise council tax. Council tax is not a fair tax. It is not fair on the elderly, who have no chance of increasing their income to deal with council tax increases. That applies especially to women, whose pensions are a scandal. It cannot be right to fund ever-increasing police expenditure in this way. The amount of police expenditure that is funded through council tax has more than doubled. It now accounts for more than 21 per cent. of force expenditure compared to 12 per cent. in 2001–02.
	We all agree across the parties that there is a need for   more police officers on the street and support for safer neighbourhoods. However, as I speak, the Government's proposals to merge police forces deliver a double whammy for local communities. People will be expected to fork out more council tax to pay for the funding gap. At the same time, they will have less of a say in how their police force is run. Indeed, there will be a triple whammy in that we do not know where the cost of the proposed merger will be lumped. Well, we can all guess.
	We are faced with a rushed and expensive merger programme that will cost millions of pounds for our police forces to put in place. We all realise and acknowledge that smaller forces can struggle with complex cases, but they should be provided with a national resource on which they can call, or another form of commissioning on which they agree. They should not be forced into a merger that will seriously undermine local accountability.
	It seems that the Government, especially given the written statement today, are determined to push on and, effectively, financially to punish police forces that do not wish to merge. Moreover, the Government are obsessed with micro-managing policing throughout the country. The latest example is the Police and Justice Bill, which is coming down the track at us. I raise the matter because the police grant to police authorities will be controlled, if we are not careful, by the Minister. The Bill will give the Home Secretary power to intervene in the business of local authorities; for example, who sits on them, what qualifications they have and how many members there are. Even more seriously, their autonomy will be removed and their function constrained by suggesting what police authorities should be focusing on in their own communities. That is not only Big Brother, but a rather nasty and controlling influence.
	While the grant will be given, local control will be taken away. The Home Secretary wants carte blanche to meddle in the composition of police authorities without having to ask for parliamentary approval. No reassurance is given to those of us who are concerned about the loss of local accountability under the police merger plan.
	As we have heard, police authorities have continually and successfully exceeded their annual efficiency and savings target of 2 per cent., including cashable savings of 1.5 per cent. As has been said, the Chancellor of the Exchequer even paid tribute to the police service for its success on efficiency savings. Clearly paying tribute is cheaper than paying.
	Separate to the settlement, a total of £125 million in capital funding over two years has been held back by the Government to be handed out to any police authorities volunteering for mergers under the Government's plans. Will the Minister announce where that £125 million is going? I would welcome a statement from the hon. Gentleman assuring us that all the police forces that do not merge will not suffer and will not receive less funding as a result.
	The Government's grant proposal is not enough overall. There are some winners, but there are many losers. They will have to make a terrible decision between unacceptable cuts, given that we have a service that is only just recovering from the swingeing reductions in finance that were imposed on it by previous Governments, or increases in council precepts that will hit the most financially vulnerable in our communities.

Roberta Blackman-Woods: I am grateful for the opportunity to raise specific issues relating to the funding of the Durham constabulary. Will my hon. Friend the Minister acknowledge that that constabulary is facing particular problems with its budget over the next two years, and that substantial cuts in front-line services are likely to occur unless urgent action is taken by the Department to address the problems?
	There is particular concern about pensions and how they are funded, not least because Durham has had an historically low level based budget. I shall demonstrate that by referring to a recent communication between the Durham constabulary and my hon. Friend the Member for North Durham (Mr. Jones). It is said that the funding gap for the authority, given a 5 per cent. increase in the council tax precept, will be £6 million in 2006–07, rising to £7 million and then £8 million in 2007–08 and 2008–09 respectively. We can use some reserves in the short term to try to close that gap, but we are looking to reduce our base budget by £8 million over the next three years. That will impact on the performance of the force as it will require a reduction in the number of police officers and police community support officers. Overtime will also be reduced as well as the number of civilian staff, leading to de-civilianisation. In addition, there will be a scaling down of support services. Clearly, we do not wish to see such consequences.
	Can the Minister give reassurance to my constituents that the gains that have been made across the county in terms of increased police numbers and a reduction in crime levels will not be jeopardised by a failure to take action to solve the current funding problem? Can the Minister give the House an assurance that he will re-examine the funding of the Durham constabulary with a view to ascertaining whether measures can be taken to solve the current problems?

Crispin Blunt: It is a pleasure to follow the hon. Member for City of Durham (Dr. Blackman-Woods), the city where I was educated. I am sorry to hear that the hon. Lady's police force is suffering in the same way as the Surrey police force.
	I could not help but reflect on the comments of the hon. Member for Pudsey (Mr. Truswell) about the people of west Yorkshire smelling the gravy. I have a pretty good idea of where the gravy train is coming from. Any examination of what has happened to the funding of the Surrey police since 1997 makes the position extremely clear.
	I tabled a question to the Home Secretary a few days ago to try to establish exactly what had happened to the funding of the Surrey police per head of population since 1997. The answers were startling. In 1997–98, the Home Office police grant per head of population was £57.80. The council tax per head of population was £19.51. Since then, in cash terms that are unadjusted for inflation, the Home Office grant has fallen to £54.29 per head of population, which has been mirrored by a fall in the national non-domestic rates per head of population from £19.72 to £16.25. The revenue support grant has also fallen from £20.01 to £15.39 per head of population. As my hon. Friend the Member for Arundel and South Downs (Nick Herbert) made clear, council tax has gone up by 192 per cent. in real terms since 1997. It is supporting the funding of the county constabulary of Surrey, the grant for which is bouncing along the floor. Of course, the hon. Member for Pudsey wants the floor to be withdrawn so that West Yorkshire police can go through the ceiling.
	We must examine why that has taken place. Surrey police has consistently faced the most stringent financial conditions over the past eight years. On two occasions during my time in the House, I took two delegations of Surrey Members, representatives of the police authority and the then chief constable to see the relevant Minister. I first took such a delegation to see the Home Secretary when he held down the position of Minister with responsibility for the police. I went with the then chief constable, Sir Ian Blair, and I had the pleasure of taking Mr. Denis O'Connor at a later stage. Those two gentlemen have gone on to better and greater things, certainly in the case of Sir Ian Blair.

Owen Paterson: They did not close the gap.

Crispin Blunt: As my hon. Friend pertinently remarks, my efforts and those of the two gentlemen failed to persuade the Home Office that the financial situation of Surrey police was desperate. They certainly failed to the close the funding gap for Surrey.
	I did not hear the Minister make any attempt to explain the fact that an enormous discrepancy remains between real inflation and police inflation. He has made generally welcome changes regarding the provision of police pensions, which will give more certainty, although he has docked 0.1 per cent. off the rise to the police to pay for it. He achieved that by making an adjustment to the floor, so there will be a loss to Surrey police and all other forces receiving floor-level funding. Police inflation remains at 5.7 per cent., which is a different rate from the retail prices index inflation. The difference between the two for Surrey police represents about £4.5 million. Police pensions continue to contribute to police inflation, even with the new arrangements, as do police staff pay, police officer pay, meeting national requirements—such as implementing the recommendations of the Bichard inquiry—and the consequences of legislation such as the Freedom of Information Act 2000. The cost to Surrey police of removing the floor would be some £15.7 million, or about 600 staff. Surrey is the lowest funded police authority in the country when measured by funding per head of population.
	The reason why that has happened since 1997 is explained by the detail of the formulae in "The Police Grant Report (England and Wales) 2006/07". The Minister said that he did not really have responsibility for formulae because they were local-government based. He said that they were not really anything to do with the Home Office because they were based on a general appreciation of need. However, sitting inside the formulae are the insidious changes that have been made across the piece to the public services of the United Kingdom, which have had a hugely deleterious effect on those services, especially in the south and south-east of England. A disaster has overtaken the Surrey police and the health service in Surrey. I have the hospital trust with the biggest debt in the United Kingdom, and the Surrey and Sussex strategic health authority is in the realms of financial disaster, too. All those problems are connected to the formulae that are applied to public sector funding.
	One or two little vignettes in the report deserve to be brought to the House's attention. I confess that I am no expert on the matter, but I have read the report and attempted to understand it. There appear to be seven separate police crime top-ups in the principal formula. I do not know whether that is because the formula has changed every year since the Government came into office because they decided to make new adjustments each year. One sees that indicators such as single parent households, student housing and a category called "hard pressed" appear more than once in the top-ups. My favourite factor applied to funding is in police crime top-up No. 6: the log of population sparsity. Population sparsity causes a reduction in the amount of money made available to the police, so the more sparse an area's population, the more money the Government remove from its police allocation. To make up for that, there is a police sparsity top-up in the formula to add back money.
	The document is enormously difficult to understand. I doubt that the Minister understands all the details because he would need a degree of mathematics to know how the formulae are determined. I would be interested to find out how they are determined, but they are way beyond my A grade at A-level maths—[Hon. Members: "Ooh!"] I have to say that I took the exam in the days when A grades at A-level maths actually meant something. One would need to be an expert statistician to understand how the formulae are determined.
	There is another extraordinary multiplication factor in police crime top-up No. 7. It says that wealthy achievers are to be multiplied by 3.0493—whatever that means—and then subtracted from the funding formula. Having included adjustments in the formulae to take account of student housing, young male unemployment, overcrowded households and all the rest, why on earth is there a need to penalise people who are identified as wealthy achievers? I looked in the document to find out the definition of wealthy achievers. If one wishes to be able to afford to buy a property in Surrey these days, being a wealthy achiever is probably a basic necessity.

David Heath: I hope that the hon. Gentleman is not going to draw attention to the adjustment for terraced accommodation because it has worked rather well for Avon and Somerset constabulary, as it has been considered to be a factor of deprivation for Georgian Bath and Georgian Clifton.

Crispin Blunt: I could also refer to terraced accommodation in Fulham, which is where my London home is. I have a vague idea of what my home is worth—it is a great deal more than it was when my wife and I bought it 12 years ago. I find it very odd that the factor is used in such a way.
	I wonder whether you, Mr. Deputy Speaker, or any other hon. Member is able to understand the definition of wealthy achievers:
	"The proportion of household residents living in areas classified as ACORN category Wealthy Achievers, as defined in ACORN data produced by CACI Limited, based upon information from the 2001 Census and the updated ACORN classification released at the end of 2004."
	I hope that the House is assisted by that. It would help if the Government, when bringing documents before the House, made them available and simplified them as much as possible so that we can understand precisely what they are doing with these formulae. I suspect that they do not want to do that because if we could see exactly what they were doing with the formulae, the extent of the rearrangement to move money for political rather than operational purposes would be made all too clear.
	My particular concern on behalf of the Surrey police authority is that it is caught in the Catch-22 of management options. If it thought that reducing the number of officers was the best way to try to maximise the limited amount of money it has for dealing with crime in Surrey, it could not do that. If it did, it would lose the crime fighting fund of £4 million. If Surrey goes under 1,921 officers, which is what it had on 1 April 2004, it loses another £4 million, even if having fewer officers would be a better way of using its limited resources. The force must have a set number of community support officers by 2008—326, I think—but the funding for that appears to come to an end in that year.
	The greatest management tool that will make life difficult for Surrey is, of course, capping. I know from having spoken to the chairman of Surrey police authority and others that it will be impossible for the authority to set a budget below the expected capping limit and sustain current performance. The Government, by imposing the capping limit, will enforce falling police standards in Surrey—that is the situation that we have to face. That is despite the fact that the authority will be plundering its reserves, which are already said to be inadequate by Denis O'Connor in "Closing the Gap".

Philip Dunne: Although I do not have the benefit of an A grade in A-level mathematics, I have taken the trouble to look at the papers provided to the House for this debate. There appears to me to have been the most monumental typographical or arithmetical error. I draw the attention of the House to the ministerial statement on 5 December 2005, in which the provisional police funding announcements were made, which indicated that the Home Office police grant would rise from £4.574 billion in 2005–06. The very same number is presented to us at the foot of the table on page 3 of "The Police Grant Report (England and Wales) 2005/06". In the ministerial statement, the equivalent figure for 2006–07 was £4.714 billion, representing an increase of 3.1 per cent. If you look, Mr. Deputy Speaker, at the table on page 3 of "The Police Grant Report (England and Wales) 2006/07", you will see that the figure at the bottom, which is the sum of all the allocations for the authorities, is £4.335 billion, some £400 million less than the figure identified—

Mr. Deputy Speaker: Order. I find two things wrong with the hon. Gentleman's intervention. First, it is too long. Secondly, he should be a little more adroit in relating it to what his hon. Friend, on whom he is intervening, has been saying. I call Mr. Crispin Blunt.

Crispin Blunt: I am grateful to my hon. Friend for his intervention because I am sure that, as he has drawn those figures to the attention of the House, Ministers can now draw on some of the services, for which they are currently paying £45,000 a day, from the consultants who are assessing the business case for the amalgamations so unwanted by police forces throughout the country.

Andrew Pelling: Will my hon. Friend give way?

Crispin Blunt: No, I will not, if my hon. Friend will forgive me. I know that others want to speak and I want to get to the end of my remarks as soon as possible
	It is suggested that the British Transport police may be wound up and their responsibilities passed to local area police forces. I understand—my source is the clerk, or chief executive, of the British Transport police authority—that the force receives some of its funding from train operating companies. In Surrey, we have the busy Brighton main line, and a number of other important train services pass through the county, but of course none of the money would be passed on from the train operating companies to assist in taking on that policing responsibility. I hope that the Minister will be able to respond to that point.
	There is only a faint silver lining to the cloud of amalgamation hanging over Surrey: the county is so poorly funded that it would have a negative dowry if it entered a marriage with any of the surrounding county forces, so they are all fighting not to have anything to do with it. If Sussex, the county of my hon. Friend the Member for Arundel and South Downs (Nick Herbert), was amalgamated with Surrey, an immediate 17.6 per cent. increase in the council tax would be required to pay for that. If we are amalgamated with Hampshire, an extra 15 per cent. in council tax will be required.
	That illustrates the extent to which the Surrey police force has been underfunded since 1997. Over the past eight years, successive chief constables and chairmen of the police authority have made a very good fist of sustaining operational performance despite enormous financial stringency. However, the pips have squeaked long enough. Operational performance will be severely threatened if this continues, and I urge the Government urgently to take a serious look at the formula. I know that my hon. Friend the Member for Guildford (Anne Milton) seeks to bring me and other colleagues to see the Minister to discuss the matter in detail.

Elfyn Llwyd: The main issue that Dyfed-Powys police authority has with the settlement is a £2.7 million shortfall. It pleaded with the Government to deal with that—and to be fair, I must tell the House that they met the authority part of the way and, on 30 January, announced a further £1.1 million. The authority still has a shortfall of £1.3 million. Unfortunately, that means a hefty increase in council tax, because that is now the authority's only option.
	Dyfed-Powys police force is opening up small police stations, not closing them down. It has an excellent track record, but it will probably be capped because it foresees an increase of 6. 8 per cent. in council tax to fund the shortfall. Without that shortfall, the estimated council tax increase would have been about 1 per cent. I understand that the authority is seeking legal advice. It is far from happy, so the Minister's rather upbeat introduction is not being echoed in Dyfed-Powys.
	North Wales has received a 3.2 per cent. settlement, and major changes to the funding formula and pension payments have been protected by the floor grant of 3.2 per cent. Unfortunately, council tax payers in north Wales already pay the highest police precept in Wales, and they face another inflation-busting increase this year. They could end up paying more than 10 per cent. extra this year just to maintain the same level of service. That is one of the four options for the force. The other "standstill" proposal would involve a 6.58 per cent. rise in the bill for policing, with the force having to find an additional £1.8 million. Last week, a police authority committee meeting at Colwyn Bay said that the authority would have to face very difficult choices.
	The performance figures for North Wales police are excellent, with the fourth lowest crime rate in England and Wales for recorded offences, at 56.1 per thousand of population. Recorded offences have dropped by 3,688, with a sharp fall in vehicle crime and house burglaries, and the detection rate has reached 43 per cent. This year's draft police authority newsletter boasts, "We are winning"—and I am sure that it is. Serious violent crime has shown an increase slightly below the UK average.
	The forecast for the police services budget involves an increase of about 6 per cent., for which the council tax increase is likely to be between 5 and 7 per cent. That is a serious position, and the North Wales police are concerned about it. As I have said, they have been performing very well. I made the point of comparing their performance to that of Dyfed-Powys, and I shall refer to that of Gwent in a moment, before briefly addressing the question of the rushed and ill-thought-out amalgamation.
	A great deal of data have been produced comparing North Wales police with other forces, and the reports show that they are performing excellently and investing in the right areas. For example, the police officer to police staff ratio is higher than in most other UK forces. Even so, the £1.5 million cut will mean between 30 and 50 job cuts, although North Wales police already have fewer staff than other forces. This will inevitably put North Wales's good financial and performance records at risk.
	Changes have been made to the way in which port security at Holyhead is funded. Obviously, this is a sensitive subject, but just as the Home Office identified a perceived gap in the capacity to deal with level 2 crime in these areas, it has cut its financial investment for that purpose in the North Wales police. The budget for police community support officers—PCSOs—will also be cut in due course. The rate at which the North Wales force is now being funded does not allow it to pay PCSOs at the right grade, which is creating problems for morale, job satisfaction and retention. And all this is in advance of the tapering that will inevitably take effect, cutting off the money from the centre to finance these officers.
	The chief constable of the Gwent police force has rightly said that the funding formula is too complex—a point that was echoed just now by the hon. Member for Reigate (Mr. Blunt). Gwent must find £5 million savings, and the suggested restructuring that we are now hearing about might have to be paid for by borrowing. That is another force—albeit a small one—that is doing excellently for its size. There are no problems at all there. Only a few months ago, Her Majesty's inspector of constabulary gave the Gwent, North Wales, Dyfed-Powys and South Wales forces a clean bill of health.
	All those forces are doing well. However, the preliminary budget for Gwent for 2006–07 shows an increase over the budget for the current year of £6.1 million, or 6 per cent. That increase, which is in line with those for other police requirements across England and Wales, will be needed to cover pay awards, price inflation, reducing specific grants on Government initiatives, pension costs and unavoidable operational items. Because of the gearing effect, an increase in expenditure of 6 per cent. and an increase in central funding of only 3 per cent. will produce an increase in council tax of 13.6 per cent—and, of course, we expect a cap of 5 per cent., so huge savings will have to be made elsewhere, including job cuts and cuts in services. That is the last thing that Gwent police would want.
	I want to talk briefly about the statement that was sneaked out today. That was an abominable thing to do. The press and media in north Wales were briefed about this matter on Friday evening, because a member of the press told me personally that "the game was over"—he used those words. As a Member of Parliament, I was rung by the BBC at my home yesterday evening, also to be told that the game was apparently over. I find it abhorrent that the Government should brief the media on a Friday, and I should be told about it on an off-hand basis the night before the statement was sneaked out through the Library today.
	That is an appalling way to do things, and it simply underlines the fact that the case for the amalgamation has not been made. I pressed the Minister for Policing, Security and Community Safety for weeks to give me the justification for the magical figure of 4,000 officers. I finally received a stupid little graph showing me how it would work. It had nothing to do with policing, and it was absolute nonsense; the case for the amalgamation has not been made.
	When the proposal was first announced in September, the Secretary of State for Wales said that the case for the amalgamation would have to be proven. It has not been proven in any shape or form. In Wales, we remain totally opposed to the proposals. Many senior officers and all the police authorities are against them. It would take a chief officer between four and a half and five hours to travel by car from Cardiff to Holyhead; that is absolutely ridiculous.

Owen Paterson: I entirely endorse the hon. Gentleman's comments about the 4,000 officers. May I add that those of us who live on the border with Wales are also bitterly opposed to having a monster force based hundreds of miles away in Cardiff?

Elfyn Llwyd: I hear what the hon. Gentleman is saying. I know that the Dyfed-Powys force is in daily contact with forces over the border, and that they have an excellent exchange of information. The North Wales police have hourly contact with the Cheshire and Merseyside forces, exchanging information and intelligence. A huge and dangerous drugs ring was busted by the police forces of South Wales, Gwent, and Avon and Somerset, working together on Operation Triban, giving the lie to the idea that the existing forces cannot handle organised crime. I presume that terrorism will stop this side of the Scottish border, because the Scottish forces, although the same size as the Welsh ones, are thought to be able to handle terrorism and organised crime. That is nonsense.

Jim Devine: Is the hon. Gentleman aware that we are discussing an FBI-type Scotland-wide police force?

Elfyn Llwyd: Well, there we are. These proposals have been rushed through since September with a great deal of urgency, and perhaps even the Scots are discussing the idea. I wonder whether they will go down that route.

Owen Paterson: Is the hon. Gentleman aware that the Scottish Labour party is proposing that Strathclyde police should be broken up because it is too big, and has stated specifically that it is not "going down the English route"?

Elfyn Llwyd: I am much obliged to the hon. Gentleman for that information. Perhaps the earlier intervention was not as clever as all that.
	I want to finish with two quotes from the part-time Secretary of State for Wales, who said on the BBC website today:
	"The argument"—
	for amalgamation—
	"has been won, but many people didn't realise that"—
	whatever that means. A better quote was that the amalgamated force for Wales was
	"needed to deal with serious murders".
	I suppose he was distinguishing serious murders from the trivial variety. What nonsense this all is!

Owen Paterson: Thank you very much for calling me to speak in this debate, Mr. Deputy Speaker, and may I repeat the apology that I made at the beginning? I was here for the opening remarks, but there was such anger locally that I was asked to make comments outside the House on the extraordinary statement that has been slipped through in the most skulking and underhand manner by the Home Secretary. I was rung up by my local radio station, BBC Radio Shropshire, at about 1.30 pm. It had already had notification that there had been a statement and asked whether I knew anything about it, which I did not.
	My secretary immediately looked on the Home Office website, but there was no mention whatever of such a statement. I then rang the chairman of the police authority, who knew nothing about it. Then I went down to the Library and got this copy, which brought the most unwelcome news that the West Mercia police force is going to be rammed into a monster regional force. Mr. Deputy Speaker, will you pass on to Mr. Speaker the fact that I find it scandalous that such a huge decision is being announced in a two-page written statement placed in the Library?
	I congratulate West Mercia on being judged the number one force in the country, according to the widest range of criteria established by the Home Office, although its geographical area is the fourth largest, and it is the largest landlocked force. It is dramatically less well funded by central Government than all the forces that surround it. It receives £94.38 per head, and as we have just heard, North Wales receives £116, while Dyfed-Powys receives £105.24 and Gwent £131.45. We are massively worse off than the Welsh forces.
	Let us compare the funding of forces in the north of  England. Cheshire is well in with £112.36, Staffordshire receives £107.96, West Midlands receives a massive £167.25, Warwickshire receives £99.69, and Gloucestershire receives £107.52. That is because West Mercia was one of the first forces to—if I may use a ghastly piece of jargon—civilianise. It took police officers away from routine activities such as answering telephones, putting those duties into civilian hands. The force is thus being penalised for its historic efficiency. This is not just a whinge about money. I am trying to draw attention to the fact that West Mercia has still emerged as the number one force in the country—although for reasons that I do not understand, the Minister for Policing, Security and Community Safety rubbishes it at every opportunity, and tries to run down its achievement.
	Only 10 days ago, I took the chairman of the authority and the chief constable to meet the Minister. They have made a strong case for the view that no financial gains can result from the huge amalgamation of the west midlands forces. As they have said, West Mercia is already an extremely efficient force that has made prudent savings, which it intends to invest in strategic policing measures to deal with issues such as terrorism and serious crime, which were mentioned by the hon. Member for Meirionnydd Nant Conwy (Mr.Llwyd). West Mercia proposes to spend £2.9 million of its own funds on an extra 95 officers who will handle those issues; it has a record in that regard. I am pleased to see that my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) has just come into the Chamber, because I was about to say that when the IRA blew up Shrewsbury castle, West Mercia dealt with it. When the IRA blew up Tern Hill barracks in my constituency, West Mercia dealt with that as well. Bizarrely, when the IRA turned up at Weston Park for the summit, West Mercia police were actively involved in protecting the terrorist leaders. They were also involved at Weston Park when President Clinton was there.
	West Mercia has been involved at the highest level in key strategic policing issues. For instance, Hereford contains the headquarters of the SAS, which must be a serious target for those who do not have the good will of this country in their sights. The force has handled all those duties most efficiently, and I cannot understand for the life of me why the Government are ignoring the fact that it is so efficient, and also so popular.
	West Mercia carried out a survey of public opinion, which is probably unprecedented among police forces. Not one of the Members of Parliament who were consulted—including a Minister and a Parliamentary Private Secretary—and not one county council, unitary council or district council has written in to approve what is going on, but 108 parish councils have written in to support the idea of retaining West Mercia as a strategic force with its own boundaries. Following a telephone survey, 96 per cent. of respondents said that they wanted the force's status to be maintained, because it spent its funds well. That is what the debate is about—efficient policing, and local policing.

David Heath: The hon. Gentleman is making an excellent case for West Mercia. The amalgamations were supposed to be based on a business case. Does he believe that the Government even constructed a business case, let alone examined and judged it, before making their decisions?

Mr. Deputy Speaker: Order. Although the question of amalgamation obviously touches on the debate, it is not the principal subject of it. The hon. Member for North Shropshire (Mr. Paterson) should direct most of his remarks to the orders that we are debating.

Owen Paterson: I am grateful for that helpful comment, Mr. Deputy Speaker. I will not be drawn too far down the road along which the hon. Member for Somerton and Frome (Mr. Heath) would like to take me. I shall simply say that with some of the funds allocated to it by the Government last year, West Mercia commissioned a survey by Tony Lawrance, professor of statistics at Warwick university. I cannot resist commenting that the force used its public funds wisely. The professor simply said
	"The conclusions drawn in respect of the 4,000 minimum force size almost totally ignore the variability of protective services performance at each force size, and no evidence is provided that this will be small at the 4,000 level."
	It is extraordinary that a professor of statistics, who may have an even greater knowledge of mathematics than my hon. Friend the Member for Reigate (Mr. Blunt) with his A grade at A-level, has completely trashed that proposition.
	The Government have not answered the professor's point. I have written to the Minister, I have been to see the Minister, but there has been no response to Professor Lawrance's critique.
	West Mercia is the number one force. It is the worst funded in my region, but it is not whingeing. It is putting money aside for strategic policing. I consider it scandalous that the Home Secretary did not have the guts to come here today, look us in the eye and answer questions from 13 Members of Parliament, not one of whom supports this outrageous, unprecedented move to create a monster police force that will be the beginning of a national force. We shall have 12 toadies around a table—chief constables beholden not to us as Members of Parliament and not to those who pay the council tax, but to the Home Secretary. He will set the targets, he will provide the pay and the pensions, and that is where the promotion will come from.

Peter Luff: Does my hon. Friend agree that the extra police officers whom we have in West Mercia are a direct result of decisions by the police authority to increase council tax? Owing to monstrous underfunding, we could not pay for them from Government support for our local police service. Local people are prepared to spend extra money on a better police service, and have expressed complete contempt for the idea of a merger between police services. Should not those local people, who have put their money where their mouths are, be listened to?

Owen Paterson: I entirely agree. My hon. Friend's constituency contains West Mercia's headquarters, and he has worked closely with the chief constable and the chairman for many years.I take my hat off to those two men, who have fought their case bravely and politely. They have an efficient force, the best in the country, although they have the least money from central Government. Their proposal that theirs should be a strategic force on the current boundaries should be respected, rather than being dismissed by the Home Secretary in such a cavalier manner.

James Brokenshire: It is a pleasure to follow that excellent speech by my hon. Friend the Member for North Shropshire (Mr.   Paterson), which summed up the anger generated by the police force reorganisations and the way in which they have been handled. I wish to associate myself with the comments about the sneaking through of today's announcement. It is scandalous that such important issues could not be debated on the Floor of the House when so many Members have a direct interest in them, and in the impact on their areas should the proposals go ahead in the face of strong opposition not just here, but in communities outside the House. I hope that the Minister will convey the sentiments expressed here today to his colleagues in the Home Office, and will reflect on the approach that has been taken.
	I want to say something about the impact of today's announcement in London. I note the amount that has been allocated to the Greater London Authority, and the fact that it includes a sum to take account of London's own impact as a capital city and its need to fight terrorism. I heard what the Minister said about the allocation of additional funds to the fight against terrorism, and that is appreciated, but it is not clear to me what will happen in outlying areas such as mine, in the suburbs of London, in terms of general policing.
	I listened very carefully to what the Minister said about the importance of safer neighbourhoods, and of focusing on antisocial behaviour. However, I remain unclear whether previous promises—on ensuring that each ward of each London borough has its own safer neighbourhood team to ensure direct accountability and a local link—will be met.
	I am fortunate in having a safer neighbourhood team in every ward bar one in my constituency, but I hear that although the plan is to introduce new teams in the next 12 months, resources will be drawn away from what are known as the core teams—the main response teams. I am very worried about what that will actually mean, and it is clear from the report that finances are rather constrained. My hon. Friend the Member for Reigate (Mr. Blunt) gave us an interesting and detailed analysis of the figures; indeed, he took a scientific, mathematical and erudite approach to them—[Interruption.] His approach certainly was very academic, although I am not sure whether he needed an A-level in mathematics or in physics to deal with the formulae that have been discussed this afternoon.
	I have grave fears about what the additional resources will mean for community policing in London boroughs such as Havering. If resources are drawn away into safer neighbourhood teams, police officers will be taken away from the core teams, yet such teams will be required to serve the needs not only of my area but of the capital in fighting terrorism.
	I hope that the Minister can respond the concerns that I have expressed about boroughs outside the centre of the capital. We need to know that we will have the real improvements in policing that my colleagues and I want to see; that we will have better, more effective and more accountable policing; and that we will ensure that local neighbourhoods and communities get the standard of policing that they rightfully deserve.

Paul Goggins: I shall try, in the little time that remains, to respond to some of the many points that were made by Members in all parts of the House. The hon. Member for Arundel and South Downs (Nick Herbert) began by welcoming the two-year arrangement, and we can all agree that that is a good step forward. However, his suggestion that the additional funding provided by this Government over a number of years was somehow not real money defies belief. We are talking about a 29 per cent. real-terms increase in central Government spending and grant in 2000–01—a period during which, of course, his party was pledged to reducing the money going into public services. Our investment has resulted in a force of more than 141,000 police officers, and we are well on the way to providing the 24,000 community support officers that we promised.
	I was pleased that the hon. Gentleman offered strong support for CSOs. As he pointed out, they stay on the street, where people can seek reassurance from them. For many CSOs, such a role is a route into the police service, and they provide a visible force. Indeed, the emerging evidence is positive. The public value CSOs and regard them as more accessible; they also feel that they spend more time in the community. As the research shows, basing a CSO in a mixed neighbourhood policing team can increase public confidence fivefold. So evidence of CSOs' effectiveness is emerging.

Bob Spink: Will the Minister give way?

Paul Goggins: I am afraid that I have no time to take interventions; I took plenty during the 50 minutes for which I spoke at the beginning of the debate. I mean no discourtesy.
	I also welcome the comments of the hon. Member for Arundel and South Downs on reducing bureaucracy. The programme in which we are engaged will put the equivalent of 12,000 police officers back into front-line policing. He gave some very good examples of how reducing bureaucracy can lead to efficiencies. We should not underestimate the scale of the efficiencies that, if we look hard enough, remain to be gained.
	We have heard many figures cited this afternoon for financing restructuring. The group looking at this issue—it was set up by the Home Secretary and includes the Home Office, the police authorities and the Association of Chief Police Officers—has had estimates ranging from £430 million to £600 million. It is simply too early to say precisely what the figure will be, but as I said earlier, the financing will come from a variety of sources: the £125 million that, as I confirmed earlier, the Home Office will make available, the reshaping of some existing commitments, and further local investment, which will yield savings in the longer term. By the longer term I mean a three-year period, no more. It is clear that that combination of investment can cover the costs of restructuring.
	As my hon. Friend the Member for Pudsey (Mr. Truswell) told the House, he and I have discussed these issues before. His constituents need be in no doubt that when it comes to arguing for policing resources, he always makes an effective case. He celebrated, as I do, the extra 480 police officers serving in his police force and the additional CSOs. We have seen the fall in volume crime as a result. I acknowledge, as I did during his earlier intervention, the gap between what the formula would have given his police force and the actual amount that it will receive. I say again that that is to the benefit of 24 other police authorities; we have to achieve stability, as well as meeting need. I should also point out to him that pension costs are covered in the settlement, and that discussions are ongoing about a counter-terrorism unit. The further announcements that the Home Secretary made at the end of January will be helpful in taking that issue forward. We continue to look at the costs associated with post-7 July activity. Stephen Boys Smith is examining airport policing generally, and the question of designation will also be dealt with.
	I apologise to the hon. Member for Hornsey and Wood Green (Lynne Featherstone) if I did not make the figures sufficiently clear, but in fact they are very clear: the total amount of central grant that we are providing is £10.574 billion. I am, of course, happy to explain how wider funding assists our policing effort. For example, the £1.5 billion that we are investing in the drugs programme in the coming year will help enormously in dealing with some of the criminality linked to drugs. On the £125 million available to help with the costs associated with restructuring, the Home Secretary has made it clear that he will consider applying some of that funding to stand-alone forces that meet the acceptable standard for protective services. I hope that the hon. Lady will take some encouragement from that. I disagree, however, with what she said about the Government's policing policy hitting the poorest hardest. The central thrust of that policy—neighbourhood policing—is about ensuring that the poorest people in the poorest communities, who are often those most affected by criminality, are given the policing service that they deserve. That goal is at the heart of all that we do.
	The police force in the constituency of my hon. Friend the Member for City of Durham (Dr. Blackman-Woods) will gain from the floor that we have put in place—to the tune of some £4.6 million—which will help it to meet the needs in her area. The force in the constituency of the hon. Member for Reigate (Mr. Blunt) will also gain from that floor—to the tune of some £1.3 million. I am glad that he welcomed some of the measures that we are putting in place, particularly those relating to pensions. I am in awe of his A grade in maths, so I hesitate to tell him that some of his figures were wrong. I shall take the opportunity to write to him and to ensure that the correct information is available. The Secretary of State for Transport is reviewing the British Transport police, which is another issue that the hon. Gentleman raised. Doing so is sensible in the context of the Home Secretary's ongoing review, but nothing that I have announced today relates to the British Transport police.
	I point out to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) that the additional £3.7 million for Dyfed-Powys police, the £2.7 million for Gwent police and the £7.2 million for North Wales police takes them to the floor and means that in that regard, they are on an equal footing with the English authorities. I hope that he welcomes that. I am sorry about the way in which he and others found about these developments. However, last Thursday's Order Paper made it clear that the Home Secretary was going to make an announcement. If a journalist puts two and two together and rings the hon. Gentleman up, that is a matter for the journalist and for him. [Interruption.] The Home Secretary did not sneak out a statement today; he made a statement that had been advertised on the Order Paper. It was freely available, and hon. Members had access to it.
	It being three hours after the commencement of proceedings on the motion Mr. Deputy Speaker put the Question, pursuant to Order [31 January].
	Resolved,
	That the Police Grant Report (England and Wales) 2006–07, HC 845, a copy of which was laid before this House on 31st January, be approved.
	Mr. Deputy Speaker then put the remaining Questions required to be put at that hour.
	Resolved,
	That the Police Grant Report (England and Wales) 2004–05: Amending Report 2005–06, HC 847, a copy of which was laid before this House on 31st January, be approved.
	That the Police Grant Report (England and Wales) 2005–06: Amending Report 2005–06, HC 846, a copy of which was laid before this House on 31st January, be approved.—[Paul Goggins.]

Local Government Finance

Phil Woolas: I beg to move,
	That the Local Government Finance Report (England) 2004–05: Amending Report 2006, HC 856, a copy of which was laid before this House on 31st January, be approved.

Mr. Deputy Speaker: If the House agrees, we will also discuss the other two motions on the police on the Order Paper:
	That the Local Government Finance Report (England) 2005–06: Amending Report 2006, HC 857, a copy of which was laid before this House on 31st January, be approved.
	That the Local Government Finance Report (England) 2006–07, HC 858, a copy of which was laid before this House on 31st January, be approved.
	That the Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2006–07, HC 859, a copy of which was laid before this House on 31st January, be approved.

Phil Woolas: On 5 December, I announced plans to the House for grant allocation to local authorities in England, and today I confirm that the Government will provide for a total grant of £62.1 billion in 2006–07 and £65.1 billion in 2007–08: increases of 4.5 per cent. and 5 per cent. respectively. On top of that, some £24.8 billion and £25.6 billion will be grant distributed by formula, which we are debating today, and those are increases of 3 per cent. and 3.7 per cent. respectively. By 2007–08, that will provide 10 years of above-inflation grant increase for councils. Specific grants will total £37.3 billion and £39.5 billion. They are a very important part of the picture because they include the funding for schools, the Government's top priority.
	Before Opposition Members rush to contrast this year's formula grant for their education authorities with last year's, they should bear in mind that a fair comparison of figures must include schools funding. All of the figures I quoted are adjusted for changes in function and financing to give a like-for-like comparison. We have also provided a two-year settlement for the supporting people grant programme. Total allocation in 2006–07 will be £1.685 billion. Allocations of 95 per cent. of grant have been announced for the second year, 2007–08, so an authority's allocation will not go below that, and it may indeed be higher.

Peter Luff: The figures that the Minister has boasted about of above-inflation increases refer to the aggregate of a county council settlement. While it is true that the settlement for education has indeed been significantly above inflation, the settlement for other areas has been below inflation, posing real problems, for example, for social services departments and highways maintenance.

Phil Woolas: I am sure that we shall come on to the specifics during the debate. My point is that if one takes a like-for-like comparison of total allocation for all councils, they have all received an above-inflation grant increase. For the benefit of the House, I shall detail the floor damping levels to which his authority and representations referred.
	In allocating grants in advance to every local authority in England, we have put a premium on stability and predictability of funding. Those are vital to councils so that they can plan ahead for service delivery. We have now announced two-year individual allocations of formula grant for every authority, and more than 90 per cent. of all specific grants that can be allocated in advance have been allocated for 2006–07 and 2007–08. With the next spending review period of 2008 to 2011, we will move towards full three-year settlements.
	Changes in grant distribution can be disruptive and I intend to minimise the extent to which that is so in the short term. In the interests of stability, we have made grant floors—a minimum guaranteed increase from one year to the next—a permanent part of the system. Further to that, for the next two years we have set grant floors—minimum guaranteed percentage increases—that are high in relation to the average increase available in formula grant. I shall list those floor figures for the benefit of the House. For 2006–07, the floors will be 2 per cent. for those authorities with education and social services responsibilities; 3.1 per cent. for police authorities; and 1.5 per cent. for fire and rescue authorities. As I have already explained to the House, that figure masks the help we are giving by phasing in recovery of the modernisation grant paid in 2004–05.

Michael Clapham: The Minister's new social services formula has had a very detrimental impact on my local authority, especially as we have had a 24 per cent. increase in the needs of the children of Barnsley and a 67 per cent. increase in the needs of young adults. That has caused great concern. Would the Minister be prepared to meet a delegation from the local authority?

Phil Woolas: I am always prepared to meet with Opposition Members and my hon. Friends to discuss matters. I shall give further details of the impact of the floors—the authority in my hon. Friend's constituency is paying for floors in other authorities. That is the important point of policy that I am now addressing. I shall explain what the floor figures are for the benefit of all hon. Members, as some authorities have not yet been mentioned.
	The floor figure for shire district authorities in 2006–07 will be 3 per cent. In 2007–08, the floors will be: 2.7 per cent for education and social services authorities; 3.6 per cent. for police authorities; 2.7 per cent. for fire and rescue authorities; and 2.7 per cent. for shire district authorities. We shall also phase in the changes for children's and younger adults' social services, with specific formula floors in those funding blocks.

Eric Pickles: Would the Minister address a technical question regarding the floors? For the first time, supported borrowing is being addressed and, from memory, the scale-back on that is 85 per cent. Those quite desirable capital schemes are included for the first time. That often means that a particular floor can sometimes have a negative value.

Phil Woolas: I want to deal with supported capital and the impact of the floors because the hon. Gentleman and a number of delegations I have met during the past few weeks have raised that point. I would argue that it arises from a misunderstanding resulting from the abolition of the notional spending amounts through the old formula spending share criteria.
	Consultation on the settlement I proposed to the House on 5 December ran until 11 January, and in the course of that consultation the Office of the Deputy Prime Minister received 336 written representations from councils, right hon. and hon. Members and others. In addition, ministerial colleagues and I met 60 delegations. I shall deal briefly with some of the main points that were raised.

Bob Laxton: As my hon. Friend knows, one of the delegations included me and representatives from Derby city council, which was one of 27 major authorities caught by the miscalculation of population figures by the Office for National Statistics in 2001. Despite the representations made by the 27 authorities affected and the fact that, by my calculations, the sum needed to settle the problem was not large—about £6.4 million—I am disappointed that the ODPM did not see fit to provide that additional sum, as it would have given Derby city council about a third of a million pounds, which would be extremely helpful.

Phil Woolas: I recognise the point that my hon. Friend makes and congratulate him and his colleagues from the council on their professional representation. I want to make a specific point about the population statistics in relation to comparisons with 2004, 2005 and 2006, so perhaps my hon. Friend will bear with me.

Paul Beresford: As the Minister knows, it was generally thought that the standard spending assessment and the formula spending share were equally complicated, but the new distribution system is really confusing and difficult. Could he help by writing to me on this point? In an inner-London council that I know well, the relative needs indicator in the formula for children to social care is 0.00051700040384. That means nothing to anybody expect perhaps a man with a computer, so will the Minister explain what it means and what would happen if he wanted to put more money into that needs sector? How does he know that it will be allocated there and not distributed elsewhere by the formula?

Phil Woolas: It seems that I have confused the hon. Gentleman with the simplicity of the formula. The abolition of the FSS, whose predecessor was the SSA, has caused some difficulties for local authority officers when advising Members on like-for-like comparisons, but as I said on 5 December, our view was that the FSS no longer served the purpose for which it was designed, if indeed it ever did. That in itself caused great confusion and, as I shall say when I set out my four clear principles for the determination of grant distribution, we have the basis for a much greater understanding of local government finance as we move through the rest of this year and the important debate, in which the hon. Gentleman has a part, on future financing.

David Howarth: Will the Minister give way?

Phil Woolas: If I may, I shall go through the principles, after which the hon. Gentleman may be informed of the beauty and symmetry of the formula. Although beauty and symmetry are not words that come to mind that often when dealing with him, I hope that he will bear with me.
	Given that we had proposed to phase in change quite slowly, it is not surprising that many local authorities commented on the impact of the damping. A number of authorities on the grant floor complained that they had gained no extra grant above the floor; for example, for capital projects. I reject that argument because the floor gives such authorities more grant than they would receive after the grant formula calculation. Other local authorities above the floor—we have heard about some of them already this evening—complained of the extent to which their grant increase was scaled back to pay for the floor applied to other authorities.
	First, of course, the floor has to be paid for, and ultimately one has to strike a balance between the need for stability and allowing larger grant changes to come through. As I have explained, the overwhelming principle in the settlement is to favour stability. Secondly, it is important to note that the real-world pressures on local government exist irrespective of formula changes and are not new, although they may be more transparent—as has been outlined.
	We have reformed the grant calculation system and some respondents found that difficult to understand. I readily concede that the system is still complex, but in the past we found that some local authorities were not happy with the idea of a simple system, as in their view it would reduce fairness. My policy is to make the system simpler. For the present, the new system has the advantage of removing the old assumptions about spending and tax levels—the FSS—thus devolving more accountability to local authorities, a policy that Opposition Members say they favour.
	The new system is simpler in principle. Apart from the damping that I have already described, grant distribution is determined by three things: first, a relative needs formula; secondly, an amount relative to the tax that can be raised locally based on the property profile in the local authority area; and thirdly, a central allocation per head of population.
	The relative needs and resource elements should be broadly familiar to Members, as the system has long contained formulaic estimates of relative need and of relative ability to raise council tax. The central allocation makes explicit what was always implicit in the system—after taking account of differences in relative needs and resources, some of the grant is allocated on a per capita basis. Fuller explanations are of course available to authorities, and to Members, in the supporting information we have provided.

David Howarth: Following the point made by the hon. Member for Mole Valley (Sir Paul Beresford), can the Minister explain how the basic amounts for each block are calculated? Is it part of the needs index or, as it appears to be, a political judgment about the balance between different spending blocks?

Phil Woolas: The formula allocations of the seven funding blocks are based on an assessment of needs, but the overwhelming determinant is the amount of formula grant available for distribution, as the hon. Gentleman knows. That is inherent in the system; we can only slice the cake in so many ways. If I may, I will take this opportunity to lay to rest the accusation—although I realise that the hon. Gentleman is not making it—that the allocation, the calculations based on need in the funding blocks and the simpler system cause an unfair distribution, either due to the type of local authority or between regions in England.
	In the settlement, we use population projections and estimates supplied by the ONS, as those are the best figures consistently available. Several authorities are pursuing issues about the figures with the ONS, which is the correct course of action, but the change in the methodology for calculating population received majority support in the consultation and provides a better look ahead as well as an assessment of historical trends in population statistics.

Mark Lancaster: Milton Keynes council benefits from a projected population figure, as we are expanding rapidly, but what the Minister gives with one hand he takes away with the other—87.5 per cent. of what we receive is lost through funding the floor settlement, which will amount to £3.5 million next year and £6.5 million the year after. Is not it the case that the floors policy is being funded at the expense of the sustainable communities policy?

Phil Woolas: My experience of these matters is that Opposition Members who benefit from the floors policy tend to remain mute, while those whose local authorities would gain more money, in addition to the extra money that they have been allocated—let us not forget that point—are scaled back by the need to pay for the floor, as he says, which is why the decision about stability in the system is so important.

David Burrowes: Does the Minister concede that there is great concern about the disparity in the ONS estimated population rates, which are not reflected in authorities such as Enfield, where numbers in all categories are increasing? The number of asylum seekers and refugees has risen, as has the number of properties. Traffic growth has risen. The number of housing benefit claimants has risen. School numbers are up. None of that is properly reflected in the ONS figures, which are based on what is now accepted to be flawed methodology—for example, in relation to port of entry questions and the figures for GP registration, which are, as the ONS itself admits, inadequate. Is not a new approach needed, which would take on board the Local Government Association's suggestion that a commission for statistics should be set up? We need an approach whereby Ministers take responsibility rather than merely conceding that there is a problem.

Mr. Deputy Speaker: Order. This is a strictly time-limited debate, in which many hon. Members are seeking to participate. Of course interventions are the stuff of debate, but they must be short.

Phil Woolas: Thank you very much, Mr. Deputy Speaker.
	The population statistics provided by the ONS are the best, most consistent figures available to us. A number of authorities have made points during the past and the current settlement about the accuracy of the figures, and a number of consultations and debates are going on between local authorities—including, I believe, the hon. Gentleman's—and the ONS.
	Several authorities have queried the funding of the new free bus travel for the over-60s and the disabled. I have therefore re-examined the proposals for the distribution of the additional money, on which we consulted extensively last summer. However, I have not found that those proposals were particularly unfair to any type of authority, nor that the extra cost of free fares, in so far as they can be estimated at this stage, place a burden out of proportion to existing public transport spending on any authority. I have therefore concluded that the settlement reflects the fairest way available to share out the money. It takes account of factors that reflect support for the disabled and the needs of areas where take-up is likely to be highest. With colleagues in the Department for Transport, we will monitor the effects and consider issues of the efficiency and effectiveness of the current arrangements for bus travel in the future.

David Anderson: On Wednesday, during Deputy Prime Minister's Question Time, my hon. Friend the Member for Tyne Bridge (Mr. Clelland) specifically asked whether discussions were ongoing about free travel in Tyne and Wear. We were told on Wednesday that those discussions were still ongoing. Unless I have got it wrong, my hon. Friend now suggests that they are not. Can he please advise us?

Phil Woolas: Discussions are still going on with the passenger transport executive and other authorities. My remarks relate to the funding formula distribution. My hon. Friend's area faces the problem because it involves a cluster of five local authorities with a passenger transport executive, and discussions are taking place there. We have been able to find £1.7 million for the metro in Newcastle upon Tyne, but that is a separate subject.

David Clelland: Will the Minister give way?

Phil Woolas: I shall give way briefly on that point. I think that you would want me to conclude my remarks, Mr. Deputy Speaker, so that hon. Members on both sides of the House can have a chance to contribute.

David Clelland: The £1.7 million that the Minister mentions came from the Department for Transport, not from the Office of the Deputy Prime Minister. On the point that he makes about ongoing discussions, that is not my impression, having spoken to the director of the passenger transport executive only an hour ago. There have been no further discussions since the meeting that he had with the Minister last week.

Phil Woolas: Let me be very clear, to help my hon. Friend and the House, and repeat what I have said about the settlement. Of course my remarks relate to the distribution of the formula grant. I have not found that the proposals were particularly unfair to any type of authority, nor that the extra cost of free fares, in so far as they can be estimated at this stage, place a burden out of proportion to existing public transport on any authority.

Adrian Sanders: rose—

Bob Spink: Will the Minister give way?

Phil Woolas: I hope that the hon. Gentleman will be able to catch your eye, Mr. Deputy Speaker, but I need to reach a conclusion for fear of being unfair to the House.
	I should just deal with a misconception promoted by several authorities controlled by the Conservative party. There is no political or geographical bias in the system, contrary to what has been said, and no taking from the south to give to the north, or vice versa.
	Following consultation, I am broadly confirming the grant distribution proposals that I made on 5 December for both 2006–07 and 2007–08. I have made fairer the adjustments necessary to reflect a change in financing for certain capital projects from supported borrowing to capital grant. In particular, that will help authorities with large building schools for the future programmes. Similarly, where fire and rescue or police authorities have provided evidence that we should do so, we have amended the adjustments necessary to introduce the change in funding arrangements for fire and police pensions. As is usual, we have made corrections to the data used, where that was justified during the consultation.
	Very few comments were received on the two amending reports for the 2004–05 and 2005–06 settlements, and I confirm my proposal to make those reports. They will enable us to take account of revisions made to population estimates by the ONS and provide a firm basis to move forward on multi-year settlements.
	I can assure hon. Members that we are committed to ensuring that local authorities can deliver effective local services without the need to impose excessive increases in council tax. That is the framework for the settlement, which takes account of the joint work that we undertook with the Local Government Association to look at the pressures that councils face in the next two years and the ways that local and central Government can manage those pressures together.
	The joint work with the LGA identified some real pressures over the next two years, particularly in respect of waste management and social services. That is why we provided an extra £305 million in 2006–07 and £508 million in 2007–08 in formula grant above what was previously planned. I make it clear that that extra funding is in addition to the funding provided by Government to meet the net new burdens principle. It gives councils the funding to continue to provide the services that local people need, taking into account the pressures identified by the LGA. There is no need for councils to threaten cuts in service for vulnerable members of society.
	We have also agreed to work jointly with local government in a number of respects, including working with the LGA in the context of CSR07—comprehensive spending review 2007—on pay, adult social care and waste. We have also reaffirmed our commitment to discuss with local government the new burdens and measures to mitigate them.

Sally Keeble: My hon. Friend says that there is no need for local authorities to cut services to the disadvantaged or for them to raise council tax. Is there any reason, therefore, why Conservative-controlled Northamptonshire county council should have issued redundancy notices to more than 700 staff, including all 197 of its youth workers, and threatened to charge disabled people for servicing their stair lifts?

Phil Woolas: I do not wish to enter into specifics—I am more than willing to do so in the wind-up if I have time—but local authorities have received above-inflation grant increases for eight years, and for some 10 years by the end of this settlement period. Although the Government recognise in our work with the LGA the pressures on local government, it is incumbent on all councils to balance their budgets.
	Given the substantial investment we have made in local government, we expect all authorities to budget prudently and not place excessive demands on their council tax payers. There is no excuse for excessive council tax and spending increases, and we will not allow authorities to impose excessive increases. We will consider the principles on which capping would be based after councils have set their budgets. We have made it clear that we expect the average council tax increase in England in both 2006–07 and 2007–08 to be less than 5 per cent.
	Local government should be under no illusion: we will use our capping powers to deal with excessive increases, as we have done in the past. I am broadly confirming my proposals for alternative notional amounts, which are notional figures used for capping purposes to give a like-for-like comparison of budget requirements between years.
	This is an excellent package for local government, as it continues the record investment in councils made by the Government and adds a step change in the stability and predictability of local finances, which has been welcomed by the Conservative-led LGA, and it will therefore enable councils to plan service improvements. I commend the settlement to the House.

Eric Pickles: The House is grateful for the Minister's explanation of the change in the grant mechanism. It will long remember that with gratitude. I suppose that it is a matter of deep sadness to him that nobody in the Local Government Association or in any of the councils thought that the change was good or supported it. I accept that the odd one or two might have supported him, but by and large two thirds of local authorities came out against it. [Interruption.] The Minister says that if local government is against it, it must be a good thing. I look forward to his next meeting with the LGA, which I am sure will be fruitful.
	At the time of the settlement, the Minister said that the
	"Government is providing local authorities in England with stable and predictable funding . . . This is enough money for local authorities to continue to provide effective local services to communities".
	With great respect to the hon. Gentleman, that makes me wonder how in touch he is with local services—something that was implied in some Labour interventions. Most councils are receiving a near-inflation increase when their costs are spiralling. Just over half of social services authorities are receiving a below-inflation increase. Many local authorities have had the goalposts shifted, and the only increase they receive is on paper.
	Again, I hope the hon. Gentleman forgives me when I say that what sticks in the throat is the sanctimonious lecturing about costs and council tax levels. That comes from the worst Department in the Government. What a title to have; it is an achievement in its own way considering the competition and what the Government have done to dairy farmers, poultry breeders, the armed forces, motorists, train travellers and, most recently, policing.
	In the past few weeks, the Department has been described in various ways. MORI said that it is a pantomime horse—in fairness, I think it was only the rear of the horse. Nine out of 10 regeneration experts have no confidence in the Department's plan. The Select Committee on the Office of the Deputy Prime Minister accused it of exaggerating the Government's achievement. More than £168 million were wasted on consultants to demolish 168,000 terraced houses. The Department is accused of operating in a climate of bullying. The ODPM is a byword for incompetence. No wonder the Deputy Prime Minister was forced to admit recently that his Department's left hand does not know what its right hand is doing. From my perspective, I am not sure that that is entirely true. I think that the left hand has finally woken up to what the right hand has been doing for years and does not like it.

Paul Beresford: Does my hon. Friend agree that there is at least one positive thing? The Minister and his Department recognise that the new formula does not fit the reality of local government needs and expenditure. All those below the floor were lifted to the floor, and yet 87 per cent. of those above were capped to fund them.

Eric Pickles: My hon. Friend makes a good point, which I shall develop later.
	The ODPM has no moral authority to lecture councils on savings or council tax levels. It might make a nice innovation next year if local authorities went through the books of the ODPM and it was accountable to local councils. I am sure that we would find some savings then.

Bob Spink: As my hon. Friend is talking about moral authority and the ODPM, will he say what impact the below-inflation rise of social services budgets will have on those who rely on them, whose need is growing way above inflation? Alternatively, what impact could that have on the council tax payer?

Eric Pickles: Given that the Government have backed a crude and universal cap, there is only one way for the argument to go. The most vulnerable will be hit this year. There is no other way to go. My hon. Friend knows that some councils will try to ameliorate the problem by cutting into reserves and spreading the money around, but given that we know what the position will be next year, and that we have a clear idea of the year after, I am afraid that cuts are inevitable. As a result of the way in which the school grant operates, it is inevitable that those cuts will hit the very people my hon. Friend wants to protect.
	This is a Government who by stealth intend to abolish district and county councils and to waste upwards of £3.5 billion in the process. Instead of showing the courtesy to the House of making a statement outlining their intentions, they prefer to govern by leak and PowerPoint presentation to chief executives. Instead of asking councils for their opinion, they prefer to sideline them by having cosy chats with officers. We know why. The last time the Government consulted on reorganisation, they were defeated by a massive no vote. I doubt they will make the same mistake again, but the voice of the people must be heard and their democratically elected representatives must be heard.
	Some £3.5 billion is too much to pay for a Department that no one would miss if it were abolished tomorrow. Some £3.5 billion is too much to pay for this gulag of despair to be seen to be doing something. If we have £3.5 billion to spare, I would rather it were spent on services that improve the quality of life of our citizens, including, to pick up on my hon. Friend's point, our most vulnerable citizens.

David Taylor: Having worked for a large shire county throughout the Conservative period in office of 1979 to 1997, I kept a close watch on their policies and attitude to the general public, and the conversion to the merits of listening to the people is so moving that it would bring tears to a glass eye. What consultation took place, and what vote were people given, on the major restructuring of local government in 1996–97?

Eric Pickles: Why restrict it to that? Why not go back to the reforms of 1881? Why not say something about the reform of corn laws? The hon. Gentleman has to understand that it is 2006 and we are into the third term of a Labour Government. Let him grow up and accept his responsibilities. There is no use going down memory lane, when he was a young man in short trousers. Let him address the reality now.

Michael Jabez Foster: Will the hon. Gentleman give way?

Eric Pickles: In a moment because I intend to refer to the hon. Gentleman. He does not look too pleased about that.
	On the settlement, most councils are receiving only an inflationary increase in grant. Half of social services authorities are receiving an increase that is below inflation. The spending pressures identified by the LGA as part of the "funding the black hole" exercise on pressures in the period leading up to the settlement have not gone away. However, I will not go through those because hon. Members no doubt remember them well.
	Most councils have tough choices to face. In an effort to bridge the gap, local authorities will seek efficiency savings, apply, where appropriate, reserves and balances, and bear down on costs. That is sensible. However, for many the choice will be between council tax increases and cutting services. The contrast between the 6.4 per cent. increase in the ring-funded dedicated school budget and the 2.7 per cent. increase in the formula for authorities with education and social services responsibility is stark. That will lead to great tensions in implementing the integrated children's services agenda at a local level.
	An analysis of 56 councils across England shows that almost eight out of 10 of those who are consulting on draft budgets are struggling. The main reasons for that are that half of social services run by councils received a grant increase of less than 2 per cent.; that an increasing number of vulnerable older persons need extra care; that there are inflation-busting increases in private sector contracts and fuel bills; and that there are increasing volumes of waste collection and disposal each year.
	The ending of the safeguarding children and additional access and systems grants paid in 2004–05 and 2005–06 exacerbates that pressure. A number of councils are proposing job cuts and service cuts, such as increasing the eligibility criteria for elderly care services. The travel concessions, about which the Minister spoke so eloquently, will not put additional pressure on local services only if no additional passengers are attracted to the scheme.
	Let us see the effects in a balanced sample of local authorities. I will take two Conservative-controlled councils, two Labour and one Liberal Democrat.

Sarah Teather: Why only one Liberal Democrat council?

Eric Pickles: The hon. Lady's party does not control very many, but no doubt she will talk about a few—although, in these loving times, we are on her side.
	In Conservative-controlled Cambridge county council, council tax is likely to increase by just under 5 per cent. To achieve that, budget cuts of £1.7 million are the only option. Key services, notably road maintenance, public transport and home care for the elderly and disabled, will suffer cuts. Surrey county council, which is also Conservative controlled, has been severely affected by the Government's new grant formula and has announced that 661 out of 7,000 staff will go in order to keep the council tax increase below 5 per cent.
	Derby city council announced in November a budget deficit of £2.3 million, which could rise to £4.5 million. That is expected to lead to increased charges and closures of many facilities, including public toilets. In order to deliver a 4.9 per cent. council tax increase, Lancashire county council needs to save a staggering £16 million in services or direct cuts, plus £4.3 million in efficiency savings. There are proposals to close nine libraries and to replace daily fresh meals to pensioners with weekly deliveries of frozen meals. York city council, which is run by the hon. Lady's party, proposes to make four special needs teachers redundant as part of more than £800,000-worth of cuts in education and children's services. The council has to make savings of £6 million.
	That is a pretty sorry state to be in. If the Minister will forgive me, I must say that I was not entirely satisfied with his answer on supported borrowing.

Henry Bellingham: My hon. Friend mentioned Cambridge. Is he aware that if Norfolk county council had carried on providing exactly the same level of services with the money that the Government have given it, it would have had to put up the council tax by nearly 7 per cent., which is obviously unacceptable to people on fixed incomes? It is ultimately delivering a council tax increase of under 5 per cent., which will make it extremely difficult for many hard-working staff and vulnerable people in receipt of different services. Does my hon. Friend agree that in that respect the Minister's expression "parallel universes" comes to mind?

Eric Pickles: My hon. Friend makes a good point. I had the joy of visiting his constituency some time ago and he was at pains to point out a number of villages that suffer from levels of deprivation that one would see in many cities. Part of the problem in his constituency is that it lacks the critical mass to be able to qualify under the grant distribution system. We have the ridiculous situation of deprivation being recognised in many cities but not being recognised in areas such as that my hon. Friend represents. It seems to me that if you are poor, you are poor, and the Government should recognise that.
	In case people think that this is just a county problem, we have advice from Mr. Steven Pick, who is the chief director of finance in Barnsley. He said:
	"Achieving a 5 per cent. tax increase will require a shift in our position—likely to have implications for all services."
	Ted Lush, the corporate director of finance and property services in Stockport, said:
	"The budget will be the most difficult ever faced. All areas will have their spending reduced."—[Interruption.]
	The Minister scoffs at that, but that is the view of a professional. He is not a party member; he has no axe to grind. All he has to do is represent the people of Stockport and to help them out.

Phil Woolas: I emphasise that the needs formula does take into account sparsity and deprivation in rural areas. The percentage increases in grant in Norfolk, for example, are 4.8 per cent. and 8.4 per cent. the following year. Is not the process that the hon. Gentleman is describing that of local authorities ensuring that the budgets balance in future years and that the pressures on councils, which I conceded and helped the Local Government Association to analyse, cannot be blamed on above-inflation grant increases from central Government?

Eric Pickles: The hon. Gentleman does himself no favours in making such points. It is parallel universe time. At a time when the number of vulnerable elderly is growing significantly and people are living longer— which is a pleasing thing—but in a vulnerable state and require additional sums, pressures on a county such as Norfolk have to be understood.

Michael Jabez Foster: Will the hon. Gentleman give way?

Eric Pickles: I will give way to the hon. Gentleman later; he has a big place in my speech and I want to give him star billing. I will come to him in due course. Let us move on to supported borrowing. I want to make some progress so that my hon. Friends can speak.

Brian Iddon: Will the hon. Gentleman give way?

Eric Pickles: In a moment.
	Part of the formula grant is to pay for borrowing for local authorities' capital programmes. That is allowed for in authorities' relative needs formulae, but it is largely counteracted by the effect of the dampening mechanism, which means that authorities on the grant floor receive no more money than the minimum increase for their class for supported borrowing, and authorities above the grant floor have their increase above the floor scaled back to pay for the floor.
	The goalposts have moved in 2006–07 by the scaling back factor of 85 per cent. for education and social services. That was a particular problem for authorities in wave 1 of the building schools for the future programme, but it does have wider implications. I want to look at two authorities—both recently elected Conservative county councils. This may be of interest to the hon. Member for Northampton, North (Ms Keeble), whom I advise to read the Hansard of Prime Minister's questions last week, during which my hon. Friend the Member for Northampton, South (Mr. Binley) pointed out to the Prime Minister that when it was Labour controlled Northamptonshire county council received a 6 per cent. increase, but that this year it was only 2 per cent.
	Let us look at what has happened to Northamptonshire because of the effect on borrowing. The council received an overall grant increase of £2.5 million, which is 2.1 per cent., to fund all services, including financial capital investment. After taking into account the cost of capital investment, just £750,000, or a 0.6 per cent. increase, is left for all other services, which may explain why service charges are going up in Northamptonshire.

Sally Keeble: Will the hon. Gentleman give way?

Eric Pickles: Let me give the hon. Lady the other example, as she might feel that Northamptonshire has done reasonably well compared with Oxfordshire county council, which has also recently become Conservative controlled. The increase in grant for Oxfordshire county council is £1.9 million. If one strips out the supported borrowing, one is left with a decrease of £1.4 million or minus 2.2 per cent.

Sally Keeble: The hon. Gentleman is confusing two councils—Northamptonshire county council and Northampton borough council. The county council received £115 million extra from the Government for its school building programme—a record allocation. On the other hand, Northampton borough council, I regret to inform him, has been dubbed the worst council in Britain and it is, indeed, Conservative controlled.

Eric Pickles: As for the hon. Lady's point about Northamptonshire county council, if she is expecting us to be helpful in future she should show a little gratitude for our intervention, as we are here to help.
	Ring-fencing is necessary because the Government want to control everything but, sadly, can manage nothing. In "Strong Local Leadership: Quality Public Services", the White Paper which was published in 2001—not very not long ago—they made a commitment to reduce the amount of ring-fenced grant to under 10 per cent. of the total grant. That seems ambitious, as ring-fenced grant now accounts for more than 50 per cent. of the total grant. That increase is a result of the dedicated schools budget, which was necessary because the Government got into a terrific mess. If I had another name, I would say that they were in a terrific pickle in 2003, when they made a promise to schools that, frankly, could not be met by the grant distribution. The dedicated schools grant is an important symbol, showing that the Government do not trust local government.
	In questions to the Deputy Prime Minister last week, I raised the issue of the supporting people scheme. I was sorry that it was dismissed out of hand, because it is a great crisis for local government. Expectations have been raised, but they cannot be met, exposing the most vulnerable to a reduction in their quality of life. To enable Ministers to understand their plight, may I cite a report by Derby city council on the supporting people programme that was published late last year? It predicts a funding shortfall of £534,000 in 2005–06, which will rise to just over £1 million in 2006–07, and to well over £1.5 million in 2007–08. The council proposes to allocate £500,000 from corporate resources to fund the projected shortfall, but the continued use of reserves to fund such deficits is not viable. It says:
	"However, the severity of cuts required to achieve a balanced budget will inevitably mean that some valued services to very vulnerable people will be adversely affected."
	The hon. Member for Hastings and Rye (Michael Jabez Foster) is fearless in standing up for his constituents. No doubt, the Friary centre is a valuable and important resource in his constituency, but the local council and East Sussex county council are about to reduce its funding. In the 3 February edition of the Rye Observer, which is on my regular reading list, the hon. Gentleman says that the decision is "blatantly wrong". Echoing Baroness Thatcher, he says it is "wrong, wrong, wrong!" It is
	"wrong because the need is manifest . . . it is not unaffordable".
	He obviously reads the information distributed by the Whips, because he says that there has been a 2.1 per cent. increase in the social services budget. However, I have a rebuttal from the leader of that fine council, who is known to many Conservative Members as one of the leading experts on local government finance. He says that there has been
	"no increase in grant for social services, roads, libraries, etc. for the last three years and only 0.6 per cent. for the 2006/7 year which starts in April."
	That is why the centre is closing. It is not a matter of councils wanting to close facilities. It is because the Government have set a 5 per cent. limit, and have not allowed a single increase.

Michael Jabez Foster: If the learned leader of East Sussex county council uses such economics and believes that the increase is only 0.6 per cent. that is why the council is in such a pickle. The truth is, it is 2.1 per cent.—the 0.6 per cent. relates to his total budget, not the grant, so he is obviously seeking to mislead. Even if that were not the case, there is absolutely no reason why he should close such establishments unless they have got into a financial pickle. Of course, they need more, but that is not the reason for the closures.

Brian Iddon: rose—

Eric Pickles: Would the hon. Gentleman do me the courtesy of allowing me to reply to the hon. Member for Hastings and Rye? I regret inadvertently starting the pickle analogy. Peter Jones, the leader of the council, is a man of considerable experience. He has taken the council out of a difficult situation, and his record in local government is second to none. The hon. Gentleman's special pleading is not persuasive.

William Cash: Does my hon. Friend agree that the precept, for example by the police authority, is a matter of the gravest concern when it hits the fan at the level of the council tax? In the case of Staffordshire—which, it was announced today, disgracefully, will be part of the merger in the west midlands—the precept is deeply resented and will have consequences for the financing of the county's constituent authorities. We fear strongly and, I believe, rightly that that will have the effect of increasing the costs, as well as centralising the system, against the wishes of the people of Staffordshire, including my constituency.

Mr. Deputy Speaker: Order. If the hon. Member for Brentwood and Ongar (Mr. Pickles) wants to respond to that, will he please do so very briefly, as we have already had the debate on police grants this evening.

Eric Pickles: I agree with every word that my hon. Friend the Member for Stone (Mr. Cash) said.

Brian Iddon: Will the hon. Gentleman give way?

Eric Pickles: I must make progress, as I want to leave time for my hon. Friends and other hon. Members.
	Let us turn to pensioners. Now would be a good time to explain what happened to the pensioners' discount. That was intended to protect pensioners from the massive increase of 76 per cent. in the council tax under Labour, but now, when the council tax is to rise even more, the discount is thought to be unnecessary. Why is that? Will the Chancellor announce it again in March? It is not in the books. Was it just an election gimmick? If the Minister said something about it when he winds up, we would all be grateful. Many pensioners are wondering how they will find that extra £200, which they had counted on.
	The Government have managed to achieve the nearly impossible for the public—below-inflation increases for most services outside education, and above-inflation increases in council tax. Truly, this is a new minimalism for new Labour: more is less, less is more—another increase through Labour's favourite stealth tax. Only by the occupant of the rear end of the pantomime horse is it regarded as addressing the needs of local government. Sadly, its melodious clip-clop will be heard stumbling through the rest of the year and making all our lives a misery.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. Before I call the next speaker, may I remind the House that there is a 12-minute limit on Back-Bench speeches, which applies from now?

Neil Turner: Labour Members would have listened with growing incredulity to the speech of the hon. Member for Brentwood and Ongar (Mr. Pickles), had he continued. I shall give him one reason for that incredulity. He mentioned Cambridge county council having to make cuts of £1.6 million. That council has a population of about 737,000. In the 1980s and 1990s, when I was a member of Wigan council, which has a population of 300,000, we were required to make cuts of £10 million by the Conservatives—not just in one year. Year on year, we had to make such cuts. It would do Opposition Members some good—those on the Front Bench as well as those who intervened earlier—if we had a few choruses of "mea culpa" before they continue their comments.
	There has been a remarkable growth in the amount of money given to local government by the Labour Government, and that is the case again this year. I have problems with this year's settlement—not with its size, but with the way the cake is sliced up. The major problem is with the formula. The new formula recognises need, particularly for social service. I welcome that. A formula based on evidence that recognises need will lead to a fairer distribution.
	However, a damping mechanism has been introduced, especially in relation to social services, so that all the gains that were made by many of the authorities in the organisation that I chair, the special interest group of municipal authorities, have been damped out. I am not opposed to damping in principle. It is right, for the reasons to which I alluded in my opening remarks. When I was on the council, I would have preferred damping to massive cuts year on year. We could have achieved much more. In this case, however, the damping is far too harsh. In SIGOMA authorities such as mine, about £250 million will be taken out of our social services. We have a floor of 2.7 per cent. That protects councils that are currently over-resourced in social services at the expense of councils such as mine that are under-resourced, and will continue to be so for some considerable time.
	I regret that during the consultation period the Minister did not take on board the case made by SIGOMA authorities and others for reducing that damping to some degree. Had he been able to reduce it even by a small amount, that would have led to about £35 million going back into SIGOMA and other authorities, including county councils. That would have significantly improved their ability to serve their people.
	It is not just a question of damping in social services. On top of that, we have damping in the overall budget, with floors of 2 per cent. and a reduction of about 85 per cent. on the amount of money that authorities receiving more than the floor should get to pay for that.
	I cannot understand why we have those two elements of damping. The local government settlement is about how the Government divvy up the amount of money that they have: it does not relate to the amount of money that each local authority will spend on any one element within it. Local authorities have the freedom to make those choices—they do not have to spend the amount of money on social services that is allocated by the Government—but a double damping effect places a tremendous imposition on them. It is imperative that the Minister considers this in great detail. It will not be an issue over the next year, because that is fixed, but when he comes to deal with the next settlement it is essential that that double damping is taken out; otherwise, we will have major problems with local government settlements in future.
	The result is that there will be quite severe cuts in the number of services provided. Those cuts are not likely to fall on particular individuals, because all good local authorities will ensure that they deal with the essentials. However, where individuals are supported by social services, the bar of access to services will start to be raised, and the charges levied by authorities will be increased. We will end up with a postcode lottery. Authorities that have a higher rate for historical reasons, and therefore benefit from the damping, will be able to provide services that authorities such as mine, which are suffering from the damping, will be unable to provide. One authority will be unable to provide the services that another authority next door is able to provide. I am sure that Members on both sides of the House, including the Minister, would agree that that situation is wholly unacceptable and must be dealt with.
	Another issue that affects local authorities in the SIGOMA areas is that most of us have primary care trusts that are seriously underfunded. The underfunding of PCTs in SIGOMA authorities amounts to £215 million. That is in addition to the £250 million that we have lost because of the damping. As a result, PCTs have no resources available to help local authorities with their social services budgets. People will not get the level of support that they need. Instead of being treated at home in dignity, close to their families, they will become more dependent and eventually have to go into acute hospitals, putting increasing pressure on the NHS. In many local authorities, it is not unusual, as Tom Jones might say, for social services and PCTs to pool resources in order to provide joint funding for those purposes. However, in SIGOMA authorities there is a single pot with two gaping holes that are pouring out £250 million and then another £215 million from those services.
	It is essential that Ministers set a time scale to end such damping. Without that, the whole formula that we have set up—I think it a good formula and agree with it—will become worthless; Ministers might as well throw straws in the wind to decide on the amount of money. The whole thing will become discredited and the whole point of it would be brought in to disrepute.
	The following two things are essential in the next round of local government settlement. First, we must have a single damping mechanism on the total amount of money that goes to local authorities. Secondly, we must have a definitive and transparent time scale, so that the damping that I mentioned can be eased out. I do not want authorities to have to make savage cuts. However, they need to understand that, because of their needs, they are over-resourced in comparison with other authorities and the Government need to take account of that.
	I say to the Minister that if future settlements do not include those two things, a lot of Labour Back Benchers will be seriously discomfited.

Sarah Teather: The local government financial year has a kind of ritual about it. It is a bit of a dance, with a touch of stand-off here, a bit of flattery there and a complex move somewhere else, all designed to distract the eye.
	Contrary to popular wisdom, the new year actually begins around October, as the Local Government Association and council leaders begin to set out their stall of doom about council service cuts and council tax rises. The Government then fight back with a macho swipe at wasteful councils and warn them that they must stay within their budget this year or face the wrath of the cap. Then there is a stand-off, a bit of a public argy-bargy, a spot of name-calling and a public falling-out.
	At the last minute, the doughty Minister trawls around his colleagues with a begging bowl to find a few extra coppers to forestall the crisis. He announces his Christmas bonus to councils in December and tells them that they need to thank him for it. However, councils protest that it is still not enough and charge their MPs to explain the difficulties to the House in January. Then councils fix their budgets, cut some vital services, hike up the council tax and the voters protest; so Ministers cap them. Councils then cut a few more services and we begin the annual dance of the pantomime horse all over again. [Interruption.] I had to get the pantomime horse in; there was a race to get it in first.
	In December, the Minister announced that a few extra scraps would again be thrown from the master's table to grateful local councils, so why do councils still moan? They complain because it is the very system that keeps them in chains, and until the Government are willing to tackle that, we shall be forced to repeat the same moves, year after year.
	In the meantime, the Government have introduced some reforms, but as the hon. Member for Brentwood and Ongar (Mr. Pickles) said, the local government community was united in opposing them. The Government had a consultation about the change to the formula, but everybody said that it would be a bad idea; they introduced it anyway. The problem with the new formula is that, far from making things simpler or more transparent, it increases the potential for ministerial discretion in the allocation of funding.
	For example, why does Northumberland get nearly £100 per capita of grant more than Somerset? There may well be a perfectly legitimate reason, but the Government should be willing to make those reasons public and transparent and to debate them.
	Another side effect of this year's settlement is that, on the whole, districts have done better than expected. That may be a coincidence, but I cannot help wondering whether it has something to do with the Government being desperate to avoid last summer's capping embarrassment, when they employed the full machinery of legislation to make an example of a set of tiny district councils, an example that for the most part provided little more benefit to the average council tax payer than the cost of a pint of beer.
	However, some developments are to be welcomed and it is important that we do so. As the Minister said, the Government have done much work to identify spending pressures with the LGA, and that is to be welcomed. We also welcome the shift toward three-year settlements, with the two-year settlement in this instance being fitted in with the three-year spending reviews.
	However, technical difficulties arise from a move to longer settlements. The Government will use projections from the 2004–05 mid-year population estimate to calculate funding through to 2007–08 and projections are, of course, based on historic trends, which poses problems for areas where population growth is speeding up, and for some northern cities, which have managed to stem population decline but where projections imply it is continuing.
	Fundamental questions also remain about the data source. The Office for National Statistics has finally admitted that, for many inner-London councils with high migration levels and very large ethnic minority communities, its population figures and methodology are fundamentally flawed. My own borough has battled with that. Brent council estimates that the ONS may underestimate its population by as many as 20,000 people, when compared with Greater London assembly estimates. The implications are real, since for every 1,000 fewer individuals in the calculation, the estimated lost revenue approaches £500,000. Will the Government look at ways of ensuring that projections are informed by the most up-to-date data available?
	There are some glaring omissions in the statement. The Government have included no amount for the cost of their latest policy wheeze—council structural reorganisation—and I wonder whether the House should assume that that will not be implemented until 2008–09, or whether it is to go entirely unfunded? The Cambridge academic Michael Chisholm calculates that the cost will be up to £3.5 million. The Government may dispute the figure, but they surely do not claim that the process will be entirely free.
	The fundamental problem with the settlement, as with last year's and the year's before, is that it provides little freedom for councils to do their job properly. If we believe in local government, we have to give councils the freedom to raise and spend their own money. That means drastic local government financial reform, not a bit of tinkering with the formula.

Adrian Sanders: My constituents are extremely confused. They know that there was a 3.5 per cent. increase in grant funding from the Government, which was one of the most generous for many a year. Yet our Conservative mayor proposes cuts of 10 per cent. across the board. Who is telling the truth? Was there an above-inflation increase, or is there really a 10 per cent. cut? If we can find out the answer, we shall know who is accountable for the cuts, or for unnecessary cuts.

Sarah Teather: My hon. Friend raises a number of points, notably about the opacity of the funding formula and the gearing effect and balance of funding, which I shall come on to discuss.
	This year, with the dedicated schools grant, which some hon. Members have described as the biggest symbol of the Government's lack of trust in local government, ring-fenced grants now total around 50 per cent. of the whole grant. If budgets are tight, that pushes pressures on to other areas. The total grant may well be above inflation, but non-schools grant increases are below retail prices index inflation, and well below wage inflation, which pushes up the cost of delivering council services much more quickly than RPI inflation does. The pressure is greatest on social services, with some authorities already stating that they may have either to increase charges or increase the qualification criteria for care, a point alluded to by the hon. Member for Wigan (Mr. Turner). The latter policy led, of course, to the now infamous case in Gloucestershire, where Richard and Beryl Driscoll were separated. I know, Mr. Deputy Speaker, that my hon. Friend the Member for Cambridge (David Howarth) wants to catch your eye to speak about some of the specific effects of pressures on funding for social services and supporting people in his constituency, so I shall not speak about that in more detail.
	As councils struggle to balance their books and pay for programmes in non-ring-fenced areas, it is council tax payers who bear the brunt as their council tax goes up again. If it goes up by 5 per cent. again this year, the average band D council tax payer will pay £1,275 a year, which is a total increase of 85 per cent. since Labour came to power. If it goes up by 5 per cent. again the following year, the figure will be £1,339, which is up 95 per cent. since 1997. In that time, inflation and the state pension have gone up by 29 per cent. and wages by 53 per cent. We can see the mismatch quite clearly.
	Voters protest about council tax partly because it has risen so quickly, but also because it is fundamentally unfair. It does not relate to the ability to pay. As was pointed out in the Lyons report, the initial public view on taxation was that linking tax liability to individual ability to pay was the fairest form of taxation.
	It is now more than three years since the Minister's predecessor, the right hon. Member for Greenwich and Woolwich (Mr. Raynsford), set up the balance of funding review, which promised to solve the local government finance system once and for all. However, we are still no nearer a solution. As is proven by the reams of briefing papers that Members need to get through a debate such as this, we have in Britain the most impenetrable, opaque and confusing grants mechanism in the world.
	We need a new system of local government finance that is based on fair local taxes, localised business rates, local income tax and a simple grant mechanism, without ring-fencing, passporting or capping. We need a new system that will let local government do the job that it was elected to undertake. We need also a new system that will stop the nonsensical ritual of financial crisis. I live in hope.

Eric Illsley: I shall keep my remarks brief because many of the issues have been raised that I wanted to take up about metropolitan authorities. It has been a disappointing settlement for the metropolitan authorities, and that relates to damping. The met authorities are deeply disappointed by what appears to be the new settlement's lack of effective change. The authorities have received the lowest increase in grant—2.4 per cent. compared with the national 3.1 per cent. For the metropolitan authorities, that equates to about £250 million. There are 17 met authorities that will have a floor increase of 2 per cent.
	The metropolitan authorities represent about 24.5 per cent. of national need. Their local tax base, unfortunately, allows them to deliver only about 22.2 per cent. of assumed local funding. That equates to 26 per cent. of total Government grant. That means that metropolitan authorities will receive only 27.3 per cent. of resources. That is a difference of £670 million to all the met authorities.
	The damping effect that will stem from the settlement is in addition to damping that has occurred in the past. In 2003–04, there were the changes to the education funding formula. Damping was introduced and met authorities lost an estimated £180 million. Changes were made to the funding formula of primary care trusts; again, that was in 2003–04, under the pace of change policy. That was £200 million less than the needs agreed by Government. As for joint funding issues, I was told on Friday that Barnsley PCT might now have to provide the funding to meet the debts of Sheffield PCT because of the political problems of our strategic health authorities. That would be a funding disaster for the area.
	Council tax revaluation, if delayed indefinitely, would have resulted in losses to metropolitan authorities. And so it goes on. The new social services formula builds on that. I shall give an example of how such damping has an effect on my area of Barnsley. There is the housing subsidy settlement of 2006–07. My area has suffered from poor housing subsidy settlements in the past. The formula did not reflect our need to spend. In 2004–05, the Government recognised this iniquity and introduced a new system of allowances. However, the pace of that change has been determined by the level of transitional protection to authorities, primarily in London, which were the losers following the 2004–05 changes. My local authority welcomed the 2006–07 draft settlement as it was proposed to move substantially towards our target allowances for housing subsidy.
	However, following consultation, additional transitional protection has been given and the top 16 gainers from that protection are all London authorities. As the national pot for management and maintenance allowances is fixed, money is being taken from authorities such as Barnsley to meet the cost of extra transitional protection for London authorities. My local authority is thus £350,000 worse off under the final settlement compared with the draft settlement.
	As my hon. Friend the Member for Wigan (Mr. Turner) pointed out, it is difficult for areas such as ours to make up any shortfall or address damping under the grant. We do not have wealthy local authorities. They do not receive income from tourism or charges for provision. We thus face pressure when trying to address the situation, which results in cuts to services because we cannot find the extra funding that we need. The authority will not challenge the capping rules set out by the Government, or implement way-out council tax increases, so services will be cut. I can tell my hon. Friend the Minister that redundancy notices were issued in the education department in Barnsley on Friday. Redundancies will occur because Barnsley will have to lose about 200 posts as a consequence of what the hon. Member for Brent, East (Sarah Teather) called an annual ritual. We face cuts and redundancies under our local government settlement, as we did in the bad old days of the previous Government.
	May I put forward a suggestion that has been made by the metropolitan authorities to try to resolve the damping situation in social services? It is proposed that an additional £305 million will be provided in 2006–07 and £508 million in 2007–08. Could £100 million of the 2007–08 settlement be brought forward to alleviate the effects of damping in the 2006–07 financial year? That would reduce the impact of the situation on social services and address the problems of four London authorities, 41 metropolitan districts, 22 county councils and 18 unitary authorities? A total of 85 authorities could benefit if £100 million were brought forward, and that would give them time to plan for the shortfall.
	As I pointed out, my local authority is once again facing cuts to services. We cannot find the funding to provide the services that are required of us with the grant that is being put forward, so we have to look at cuts, which is why redundancy notices are being served as I speak. In line with the representations that the Minister has received from the metropolitan authorities, will he remove the social services damping to some extent, fund the cost of the overall floors, implement a form of funding to take account of the effects of population decline and put in place a funding mechanism to compensate for the lack of revaluation?

David Curry: There is always a familiarity to these debates. The Minister stands up like the captain on the bridge scanning the horizon saying, "Well, the weather's absolutely fine and the horizon's quite clear. There might be a very slight swell, but no one need feel the slightest bit seasick." At the same time, down in the engine room, the chief engineer is saying that a horrible clanking noise is coming from the engines, and soon smoke begins to appear. The two views of the settlement are totally dislocated. We have just heard the view from the engine room—the northern metropolitan authorities—from the hon. Members for Wigan (Mr. Turner) and for Barnsley, Central (Mr. Illsley). They said that there are real difficulties with the settlement and they are the ones who have got it right. Despite the undoubted passion with which the Minister made his speech, he is simply looking at the horizon through opaque spectacles.
	Three things are noteworthy about this settlement. First, education spending has now become totally divorced from the rest of local government expenditure. It is distributed by a different Department and according to an entirely different formula; indeed, in many ways it is the opposite formula to the one used by local government. The formula rejected by local government has now been adopted by the Department for Education and Skills, so we are back to the dear old happiness of joined-up government.
	The Office of the Deputy Prime Minister has lost a huge chunk of its empire. I never cease to be amazed when I hear Labour Back Benchers chuntering about how the education White Paper has got it all wrong, and local authorities need a much greater, enhanced role supervising the way that education operates. At the same time, they have simply watched the Deputy Prime Minister's authority in this matter draining away. They are rather late in closing that stable door.
	The second point about the settlement is that, in fact, schools do rather well, even though the Government have resorted to rather a crude method of buying off the argument because the events of 2003–04—you will remember, Mr. Deputy Speaker, that some local authorities were not given sufficient additional grant in total to fund the increases that they were supposed to give to education—are burned into their consciousness.

Michael Jabez Foster: Has the right hon. Gentleman made any assessment of what the situation would be if the Conservatives had won and given local government a zero increase in real terms?

David Curry: I know that the hon. Gentleman is under pressure, but as my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) pointed out from the Front Bench, we are quite a long way into a Labour Government. The formula has been changed about five times already. This is a Government who said that they were going to find a completely new way round local authority funding, and all they are doing at the moment is sitting there waiting for the Lyons report to come in, rather like Polynesian natives waiting for the cargo boat to arrive.
	Because education has done quite well, the rest of local government has done quite badly—we have to be honest about that. There are tough measures for social services, highways, waste and amenities, and that is accounting for the smoke and mirrors of the Gershon review. Curiously enough, the name "Gershon" did not pass the Minister's lips this evening.
	The third point, which in many ways is the most important of all, is that, on any reading of the Chancellor's expenditure plans, the future looks pretty tough for all areas other than his three, or two and a half, chosen special areas of health, education and overseas development. After the public expenditure boom, we are now heading for the bust. That means, inevitably, council tax will become much more acute as an issue, rather than less important.
	What has been happening? We now have two settlements. In fact, if one counts the police settlement separately, we have three. There is the revenue support grant and the dedicated schools grant, which flows from that debacle in 2003–04. The schools grant rises by 6.4 per cent. in 2006–07 and 6 per cent. the following year, and the grant for other council services rises by about 3 per cent. The schools money is based on existing expenditure—just 5 per cent. and a tiny bit more for London—plus an allocation by formula.
	What is interesting is that the Deputy Prime Minister has derided notional spending assessments, such as the standard spending assessments, because they are misused and people dare to extrapolate the level of council tax. Heaven forbid that we should dare to extrapolate by how much the Government might require councils to increase their tax. All those have been dropped, but nobody has passed the message down the road to the Department for Education and Skills. Local authorities whose spending was below the schools' formula spending share will now get extra grant to enable them to move towards it.
	I suggest, if I may, that Ministers look back—I know that they constantly do so; the Minister for Local Government is always looking back—to see how their predecessors used to fulminate against need assessment. Lord Hattersley is a wonderful example of the fulmination against need assessment. Believe it or not, need assessment is now enthroned as the basic principle of local authority funding. But that has brought about what I regard as happy ironies. In 2003–04, as my hon. Friend the Member for Brentwood and Ongar will remember, the Government were accused of manipulating the system to direct money towards their friends in the north. The fact is that because population has emerged as one of the few remaining quantitative elements in the determination of the grant, money is now moving back down from the friends in the north. The Minister, for once, is right for the wrong reasons: this is not manipulation in favour of Labour councils; in many ways, Labour councils will feel the pinch of this settlement rather more than other councils. All I can say is that that is ironic, and that it is nice to see the chickens coming home to roost.
	We now have a system with so many floors, ceilings and damping mechanisms that the whole thing looks rather like the design for the house of horrors in Hitchcock's "Psycho", and the Minister was rather like the corpse in the cellar, judging by the passion and enthusiasm that he put into his speech this afternoon.
	Where are we heading in the long term? The Institute for Fiscal Studies has calculated that the pre-Budget statement indicates a real increase in public expenditure between 2007–08 and 2010–11 of just 1.8 per cent. Once the Chancellor has made provision for his favoured services—health, education and international development—all the other services will have to fight over an increase of about 0.8 per cent. a year. That will include the bulk of the services that now fall under the revenue support grant.
	That means that council tax bills will rise, to the extent that they are permitted to do so under the capping procedures, and that there will be cuts in services. It is no good the Minister simply asserting blandly that there is no reason for anyone to cut anything. We all know that the inflation that affects local government services is entirely different from the broad, RPI-type of inflation, because so many local government services are demand led. So this will hit the services which, by their very nature, find it hardest to marshal a lobby. Social services tend to be fragmented because they involve a host of relatively small-scale support services for families, carers, elderly people and children, for which demography and social change are fuelling increases in demand. They will feel the pain, together with the smaller services that bear crucially on people's quality of life in their immediate environment.
	Of course a two-year settlement is welcome, because if councils can have nothing else, at least they can have a certain amount of predictability of their own misery. That will give them some assistance. No doubt, in two years we shall have reached the Chancellor's next cycle of public expenditure, for whose review letters are now dropping into the postbags of the various Secretaries of State. Perhaps we shall also have received the long-delayed, much-deferred and much-hoped-for Lyons review.
	The Government talk incessantly about joined-up thinking, yet it is amazing how dislocated the whole process of the grant has become across the public services. Their motto seems to be: "Keep your heads down, chaps, and hope". The Minister made a speech today that put that into language, the poetry of which has entirely overwhelmed me. Local government is going to face some very difficult times.
	This is an inevitable settlement; there is no point in pretending that the Government are going to dish out a great deal more money. We all know that the chickens have come home to roost in regard to public expenditure. Local government had better batten down the hatches and prepare for some years of this, and council tax payers had better prepare themselves for council tax increases to go on rising steadily, because we are locked into this syndrome and there is no escape from it.
	The Government must regret some of the wonderful promises that they made in their early years about how they were going to introduce an entirely new structure in local government funding. It was as though they were just waiting to discover the north-west passage. As I have said before, we shall discover, unless Lyons proves to be a remarkably efficient icebreaker, that there is no such thing as a north-west passage in local government finance and that, for the time being, we are stuck with this.

David Clelland: It is a great pleasure to follow the right hon. Member for Skipton and Ripon (Mr. Curry). He has some knowledge of these issues, and I recall that he was one of the better Conservative Ministers for local government. However, what he has just said has demonstrated that, while Ministers and Governments may change, the civil service trundles on, and what he said about inflation was astounding in its audacity. I remember him and other Ministers standing at the Dispatch Box saying exactly what our Minister has said today, reading from exactly the same script. They said that local government had had a bigger-than-inflation increase and that there should therefore be no problem. I have been hearing that speech for the past 20 years, and it has not changed.

Michael Jabez Foster: This is only a suggestion, but were not the Ministers wrong on those occasions? In those days, they were cutting public spending.

David Clelland: I accept what my hon. Friend has said, and also what was said by my hon. Friend the Member for Wigan (Mr. Turner). At least local government settlements have gone the other way since 1997, and authorities have benefited from some improvements.
	My hon. Friend the Member for Wigan also spoke of inequalities in the system, and those are what concern us in the north-east. The system is based on a flawed formula: we know that, because the Government commissioned the Lyons report in an attempt to come up with a different system and a new formula. The north-east continues to come out worst whenever a settlement is announced. This year the Minister has announced an average settlement of 3 per cent.; the average settlement in the north-east is 2.7 per cent. Along with that, we have to compete with our next-door neighbours in Scotland, who benefit from the Barnett formula. It is somewhat ironic that the Federation of Small Businesses in Scotland produced a report today showing that the north-east of England is at the bottom of the league according to a series of key social indicators, while in most instances Scotland is above the average.
	The Minister has announced a 3 to 3.5 per cent. increase, but Gateshead in the north-east has ended up with 2.5 per cent., even less than the north-east average—although according to all the indicators it needs support from central Government, and although it is a beacon council that the Government constantly cite as an example of good local government. Westminster, with all its high-value properties and high incomes and all the advantages of the lucrative business that surrounds it, has received an increase of 2.9 per cent., which is set to rise to 4.6 per cent. next year. Gateshead's increase is set to rise to only 2.7 per cent. How can that possibly be equitable or right?
	Ministers have tried to resolve some of the problems. They have made adjustments in an attempt to iron out some of the anomalies. As the settlement demonstrates, however, the inequities have not been removed. I believe that that is because Ministers have found the system to be so skewed that ironing out the unfairnesses in one fell swoop would require a huge shift of resources from authorities that were favoured under Tory Governments in the past, with all the political consequences that would ensue.
	Ministers have therefore introduced what my hon. Friend the Member for Wigan describes as damping. The aim was to avoid the political fallout, but it also means that the full benefits of a fairer system, and of the changes that Governments have made, are not passed on to the local authorities that need them most. It is estimated that that has cost metropolitan authorities £250 million in social services funding alone, and a further £180 million has been lost to metropolitan education services.
	Those inequalities have been further aggravated by a new factor in the formula: households with residents aged over 90. Unfortunately, the north-east is very low down in the league when it comes to health inequalities, and few of our households contain residents over the age of 90. We therefore cannot benefit from that change in the grant, but our old people still need support. Indeed, they may need even more support because of the health equalities to which I have referred.
	Young people are also affected. After all that the Government have said about "Every Child Matters", how can it be right for councils in London to receive up to three times more for each child than those in the north-east? What possible justification can there be for that?
	The right hon. Member for Skipton and Ripon mentioned the population issue. It is a key factor in grant distribution, but it too can work to the disadvantage of the areas in greatest need. If half the people move out of a street, we do not see half the paving stones being removed or half the street lights being turned off. The same services must be provided, even if the population has been halved. Falling populations are tied too closely to the allocation of resources, and too little consideration is given to the continuing need for services even when a population is in decline. Indeed, the need may be greater in such circumstances: it is often the economically active and the skilled workers who depart, leaving behind vulnerable people who require even more support.
	The projected figures show that the population in the north-east is actually rising by 2,000 a year, but according to figures from the Office for National Statistics—as was acknowledged earlier, they are incorrect—the population is falling. So as a result of the population factor, we are suffering yet again in terms of grant allocation.
	The other issue, which I am afraid the Government have ducked, is revaluation. Revaluation is important in an area such as mine. Ministers often talk about the difficulties of being in government—about how being in government is about making tough decisions and not being afraid to make unpopular decisions—but they backed away from revaluation only too quickly.
	The Minister mentioned the free bus travel scheme that is due to be introduced in April—an issue that I have raised in the House several times. The Chancellor of the Exchequer announced a £350 million fund to pay for the scheme and, by all accounts, that should be enough money to finance a free bus fare system across the country. However, some genius decided that the money should be distributed through the revenue support grant system, which is in no way related to the specific issue of the concessionary fare-travelling public. I do not know which civil servant made the suggestion or which Minister took that advice, but both should be surplus to requirements. The result was that this issue got lost in the system, and areas such as Tyne and Wear, where the population is relatively low but the use of public transport and concessionary travel is relatively high, therefore lost out. However, areas with greater car ownership—where more people travel by car and fewer travel by public transport—got more money than they need to run free bus services. Tyne and Wear ended up with £7.5 million less than it needs to run the scheme.
	I have raised this issue with the Minister in the past few months and, to be fair to him, he has listened carefully and done the best that he can to resolve it; however, it has not been resolved. He referred earlier to the extra £1.7 million that Tyne and Wear has been allocated by the Department for Transport, which will help to provide free fares on the metro light rail system. We cannot have free fares on buses and not on the metro, because if we did, the metro would suffer a loss as a result of people switching to the buses. Secondly, a lot of people, particularly in the east end of Newcastle, rely on the metro rather than the buses, so it would be unfair to them if they had to pay and others did not; the situation has to be equal.
	Funding free travel on the metro cost £1.7 million, but we are still more than £5 million short of the money needed to run the free bus service. That means that at next Wednesday's budget meeting, the passenger transport authority will have to cut concessionary fares for young people generally, and specifically concessionary fares for those attending college. I have been a Member of this House for 20 years and a public representative for some 34 years. I do not know how many advice surgeries I have run in that time, but it is certainly a lot. Last Saturday, for the first time ever, at two separate advice surgeries two completely different representations were made on the same issue by people who were completely unconnected. They were pensioners, and they told me that they did not want something that the Government were going to provide: they did not want free bus travel in Tyne and Wear to be provided at the expense of concessionary fares for young people. However, this is what we are having to do because the Government have failed to resolve this issue.
	I appreciate what the Minister said about the legal problems that the Office of the Deputy Prime Minister faces in trying to dish out money to different local authorities. I said some time ago that if Ministers cannot resolve this issue, we will ask the Prime Minister to do so. He has responsibility across the whole of government, and not just for one Department. But I am now told that I cannot speak to the Prime Minister because discussions are ongoing. Well, I hope that the Minister can resolve this issue, because so far as I am aware, discussions that might resolve it are not in fact ongoing. The ODPM has given us the definite answer that no further money will be forthcoming. The problem therefore remains, so I hope that the Minister will unblock the situation and allow us to have our meeting with the Prime Minister.
	The Government hope that the Lyons review will point the way in solving the problems associated with local government finance. However, there is absolutely no way that any review can come up with a solution that will produce a fair system that does not involve a massive shift in resources between regions, nations and local authorities—that is, unless the Government provide huge extra resources to correct the anomalies that have been allowed to build up.
	I await with interest the outcome of the Lyons review, but I am not optimistic that Ministers of any Government will ever have the guts to do the right thing.

Paul Beresford: One of the nice things about following—admittedly, one step behind—my right hon. Friend the Member for Skipton and Ripon (Mr. Curry) is that he fires the traditional shots across the bow, so I can afford to be more parochial, which also means that my speech can be shorter.
	The Minister, as ever—although it is not a failing restricted to this Government—described the figures as a tremendous increase, while ignoring the fact that, as has already been pointed out, education has been removed. He also ignored the fact that the percentage is based on the change that was introduced with the FSS—the formula spending share. To be parochial, that change meant that Surrey county council lost £39 million year on year. So any percentage increase dates back to that loss, and I suspect that some of the officials who guide the Minister on such matters are very aware of that, because they live in Surrey.
	The changes were so dramatic that the Government had to introduce floors and ceilings as buffers. The ceilings have gone, but the chop for those well above the floor is dramatic. It affects those well above the floor in order to raise others to the floor. The new system coincides with the dedicated schools grant, which removes education funding from the normal grant. The new grant system, as I pointed out earlier, is extraordinarily complex, and needs a brain capable of rocket science to manage it. It is impenetrable. The Minister is giving me looks of surprise, but even if he has the intellect to handle it, what I am saying will be no surprise to anyone else who has tried to struggle with it.
	Surrey county council's formula grant was drastically reduced on the introduction of the FSS, to £101.4 million. Without the buffers it would have been reduced to £65.1 million—a potential reduction of 39 per cent. Fortunately, the Government have recognised that such a cut would be a tad too far, so they have introduced the buffers and the actual grant will be £103.4 million. However, because of the requirements built in by the Government for the minute-by-minute handling of local government such as inspections and comparative performance assessments, the limiting of the council tax rise for the coming year to 5 per cent., and the possible lowering of the floor in future years, Surrey county council will have to introduce some £50 million of cuts over the next two or three years.
	I accept that many local authorities can make efficiency savings, and I hope that most of Surrey county council's savings will come from such a source. However, given the size of the cut, it cannot all be found from efficiency savings. Constituency letters about the potential impact of the cuts are already pouring in.
	When I was a Minister dealing with these issues comparisons were always thrown at us, and I wish to pick up an example given by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles). He mentioned that Labour-run Lancashire county council would have to make cuts in the next financial year. However, Conservative Surrey has a grant per head of population of £95.85 and Lancashire has a grant per head of £191.96—more than twice that of Surrey.
	I remind the Minister of his second principle, because he should look carefully at the ability to pay. I have raised that issue already in the debate on the revaluation, and I suggested an alternative approach. The present approach is a duplication of that under the FSS, and hidden in the formula is the spread of properties over the council tax valuation bands. That is not a fair way of making the calculation. Surrey receives the second lowest grant of the English shire counties, yet it is the second most expensive area of England in which to provide services. To put it more simply: the value of properties is spread across the higher echelons of the bands, because they are more expensive to buy and maintain, with bigger mortgages that cost people more, so they are less able to afford the huge council taxes that are required because the grant has gone down.
	Unusually, I am not asking the Minister to change Surrey's grant. That would be a hopeless request and a waste of my time. If the motion is put to a vote it will roll through, with Scottish MPs behind it. I am asking him to look ahead and think again about his second principle. Will he look at ability to pay—I hasten to add, before there are squawks of encouragement from the Liberal Benches, that that would still be on the basis of a property tax—and recognise that we need a mixture of an understanding of property values and the cost of living? The cost of living in Surrey and London is much greater than in the rest of the country, so that proposal would give a much fairer balance and might stifle the protestations about local income tax from some corners of the House.

Michael Jabez Foster: It is not new for East Sussex county council to whinge; it does so annually. Indeed, back in the 1970s I took part in the whingeing, although then we had some cause. In the four years to 1997, our real-terms funding was minus 7 per cent., and that included education. There is a history—and that situation occurred not long ago. Even more recently, at the general election, the Opposition offered us a zero increase in local government funding. If that had come about, we should be experiencing real problems.
	This year, East Sussex county council received an extremely good education settlement—and not minus 7 per cent., but a 2.1 per cent. funding increase, to deal with everything else. As the hon. Member for Brentwood and Ongar (Mr. Pickles) pointed out, the council's Tory leadership suggests that the increase was only 0.6 per cent. That is wrong. Let us at least get the facts correct: it was 2.1 per cent., more or less in line with inflation.Given such an increase, it is shameful that the council is trying to destroy many important local government services, especially social services. I am grateful to the hon. Member for Brentwood and Ongar for mentioning that the only day-care centre in Rye for older people is to be closed.
	I am honoured to be president of the local branch of Mencap, but funding for its active art provision for about 60 adults with learning difficulties is to be completely withdrawn. One of the cruellest cuts of all will affect Rethink SOS, which helps people in the first weeks after they have attempted suicide. As far as the service is aware, no one has tried to take their life again. That may be luck, but the service has been vital, and its funding, too, will go completely. Furthermore, £500,000 is to be withdrawn from care for carers. The Government may have made a mistake in not ring-fencing the care grant, as they originally proposed, because the Tory council is now able to cut it, as well as funding for respite care. That shows what caring Conservatism means in East Sussex. At least we have a test bed—we know what Tories do when given the opportunity—so that will be a lesson, despite what the new leadership suggests.
	Such things might have been necessary if the funding had been cut, but with an inflation increase in grant and a double-inflation increase in the council tax proposed, they are simply unnecessary. None the less, is 2.1 per cent. enough? Cuts are not necessary this year because the county council can look to balances and other funds, but I have to tell my hon. Friend the Minister that in the longer term, it would not be possible to maintain such services if an increase of 2.1 per cent., covering inflation only, were provided.
	The reason is very obvious. East Sussex has a growing elderly population—many people are over 85 years of age—and the formula is flawed. The Minister well knows about that because he has been gracious enough to listen to the arguments made by East Sussex county council—or perhaps he did not quite hear them, but he certainly listened to them—and there is certainly a need for additional funding for people over 85. That is very important, but it has not been fully taken into account.
	Moreover, East Sussex has particular needs because of the cost of labour. We are just outside the home counties, but we compete with them for labour. My hon. Friend will say that the area cost adjustment has been spread, thus making it fairer, but it does not feel like that in East Sussex; the truth is that the current formulation of the ACA allows counties way outside the London area to benefit, and we lose out.

Phil Woolas: May I draw to my hon. Friend's attention something that I announced in the statement of 5 December? During this round, the intention is to review the geography of the ACA, given the points that a number of councils made in their representations.

Michael Jabez Foster: I should have given my hon. Friend credit for that. I said earlier that he listened but did not hear, but he obviously did hear, and I am grateful to him for indicating that there may be some hope for future years, which is, of course, what we are talking about.
	The formula also has another flaw. My hon. Friend has mentioned that the property value arrangements have changed, but it seems to me—he may want to respond to this in his reply—that property values are still taken into account. For example, a pensioner or postman on precisely the same income living in an expensive property in Hastings or East Sussex will have no greater income than a similar person living elsewhere, but the property value will be taken into account in determining the needs element under the formula.
	I repeat that this year, East Sussex county council has no reason to make the draconian cuts that it intends to implement—but next year and the year after, there may be an argument for doing so unless the formula is reassessed. I want to ask my hon. Friend a question. How is it that a pensioner in Hastings—the 30th poorest town in Britain—is worth £657 per capita, whereas the sum will be as great as £1,000 or more in other parts of the country? There is no justification for that, and I very much hope that my hon. Friend will think again about the grant settlement in the near future.
	I thank my hon. Friend for the fact that the borough council in Hastings, where a concentration of need exists, has done extremely well. I am grateful to him for that money, which the council has been able to spend extremely wisely in improving local services, but the difficulties are magnified in a poor area in a not-so-poor region or county, and we need to find a way to deal with that problem. I ask him to tell his friends in the Department of Health that we need to keep our primary care trust, lest a wider spread of the resources create the same problem.

Anne Main: I am pleased to follow the hon. Member for Hastings and Rye (Michael Jabez Foster), who drew on the nub of my argument, which is that it is possible to have areas of relative deprivation in places such as St. Albans, and it is hard for people in those areas to pay high council taxes.
	St. Albans is a constituency that is stereotyped as being wealthy, but it has areas that are characterised by having poor housing, poor health outcomes and poor future prospects. We endure high housing costs. I stress "endure" because many young people are struggling to get on to the high housing costs ladder. As a result, we have long waiting lists for social rented housing, significant levels of homelessness and overcrowding. For many, the council tax is an enormous growing burden that they struggle to pay.
	As we know, the council tax is divided into four categories: parish, police, district and county. The residents, however, do not see it like that. They make no distinction and just see the final figure that lands on their doormat. Since 1997, council tax bills in St. Albans have increased by 96 per cent. A standard band D household could expect to pay £634 in 1997. The same household would now expect to pay £1,242.
	What is the major cause of this grief? I talked to both county and district councillors, and the main holes are in their county, district and policing costs. A constant complaint is that a huge number of extra responsibilities and duties have been placed on authorities in each sector, but the funding does not reflect that. A person might ask, "Do I have a profligate county council?" Labour Members implied that some Conservative county councils either keep money to themselves or throw it away.
	Conservative-controlled Hertfordshire county council is rated as excellent. It is one of the best in the country and has received a four-star rating for the fourth successive year. Hon. Members should accept that it knows what it is talking about. Hertfordshire county council is on the grant floor, so any rise is 2 per cent., which nowhere near reflects the costs and demands placed on its services. The leader of the Conservative county council, Robert Ellis, tells me that to keep costs down, it has doubled the efficiency savings that the Government required it to make. It is being very prudent. However, the margins are now tight.
	Hertfordshire has pressed the Government—I am sure that the Minister is aware of this—for a realistic level of funding. The headline statistics make worrying reading. In the financial year 2006–07, the formula grant is nearly £150 million—an increase of just 2 per cent. Hertfordshire is one of five authorities with the lowest increase out of 14 other comparable shire counties that also have fire responsibilities. The average of all authorities in England is 3 per cent. For 2007–08, the formula grant is a little over £151 million—an increase of 2.7 per cent, but lagging well behind the rest of England, which will get an average of 3.8 per cent.
	What do those different figures mean for my constituents? I am told that with a grant floor it will be very difficult for Hertfordshire to invest in new capital projects, such as schools and transport. That comes at a time when the building schools for the future programme and local transport plans mean that there will be a high expectation of local authorities delivering significant new investment. However, Hertfordshire believes that it will have to cut key front-line services.
	Hertfordshire has one of the highest incidences of people with learning disabilities in local authority-supported residential care. The demand for that service is one of the main reasons for the council spending above its funding limits for personal and social services. However, the calculations take no account of the relative needs of people with learning difficulties, so yet another funding expense will land on the taxpayers' doorstep.
	The recent Buncefield disaster will have a major cost implication of £2.5 million for the authority, despite the Bellwin formula settlement. That disaster alone will equate to an extra 0.65 per cent. increase in council tax. My district council will also have an ongoing cost as a result of Buncefield. Talking to it today, it said that it will have to monitor the water and environmental impact for years to come and there will be no additional funding. As I said, council tax bills have risen by 96 per cent.
	It would be easy to add fuel to this particular roaring fire because we have a Liberal Democrat-run district council. On top of all the other woes for my constituents, it felt it necessary to appoint an additional diary secretary, at £33,500 extra per annum, and a new chief executive, who we have always managed without, at an additional £100,000-plus per annum. On top of that, the councillors have just awarded themselves a pay rise of 33 per cent. I do not want to get carried away with or distracted by those figures. There are serious issues of additional Government-imposed responsibilities that are not funded adequately.
	One particular extra duty that the Government have placed on the district council is a higher recycling target. We all welcome the push to encourage greater recycling, and to be fair the Government have supplied capital funding to acquire new wheelie bins, public service vehicles and so on, but no extra funding has been provided to run the additional recycling rounds. That means an extra £100,000 burden. The head of finance at St. Albans district council today told me that he estimates conservatively that that will cost the council £400,000 in addition to the standard refuge collections.
	I am also told by officers in the licensing department—I have mentioned in the House before the fact that St. Albans is supposed to be one of the towns with the most licensed premises in Europe—that the Licensing Act 2003 has meant that additional staff are needed to deal with inspections and to man a noise nuisance helpline, which the council feels obliged to run 24 hours a day. That means an additional £80,000 net of the fee in extra costs to the council.
	Another area of concern is the disabled facilities grant. I am told by my council that year on year it has had its contributions cut. I would welcome the Minister's response to that, but that is what I have been told. This year the council will receive a £25,000 real-terms cut. Demographics are changing. In St. Albans, more and more elderly and disabled people are staying in their own homes, and we welcome that. Rightly, the council wishes to try to help them to stay in their homes and to live valuable, long lives. However, the Government have also increased the eligibility criteria, which will come into effect from 1 April. That will give additional responsibilities to the local council at additional costs. More people will be eligible for help. One thing that has come through is that families of disabled children will no longer be means-tested. That can be welcomed, but the effect of it and other changes is that the budget will need to rise in St. Albans from £250,000 to £1 million in 2006–07. How are we to fund that? My council says that it will use the proceeds of the sale of council houses.
	To return to the early part of my speech, I have massive lists of people and full surgeries of those who want houses in the social rented sector. Perhaps there is not the reinvestment that the Government would like, but the council is having to fund this budget deficit. Instead of money from council house sales being ploughed back into providing much needed accommodation, it will have to be diverted into building extensions and adapting housing for disabled people who qualify for grants. As more and more elderly and disabled people are living in their own homes—private homes, I might add—the majority of grants from the public sector will be diverted to residents, who I accept are needy, in the private sector. A rather perverse and, I would imagine, unforeseen method of wealth distribution is happening in St. Albans.
	The Government give a per capitation figure for the eastern region to deliver disability grants, but as has been said, there are certain cost implications in certain areas. With the high cost of building and employing staff in St. Albans, that figure will not go anywhere near to covering the cost of allowing elderly and disabled people to have their homes extended to facilitate their living at home. My council is very worried, and to quote the words of one officer today:
	"We have just about reached the limits of our ability to tax the public".
	I do not have time to address the £5 million year-on-year, real-terms deficit that my chief constable told me and other Hertfordshire MPs only last month he has had cut from his budget, or the £17 million rebranding exercise that may happen as a result of police amalgamations, which will also land on the tax payers' doorstep. Needless to say, that will all add to high bills for my constituents.
	My council is calling on the Minister for support for capital investment delivered through capital grants. That is exactly what it has written to him about. It wants a fairer and more transparent grant system that recognises the true cost of extra demands on services and which, more to the point, the person in the street can understand and see as reasonable and fair.

Richard Benyon: The few words I wish to say may sound a little parochial, but many right hon. and hon. Members across the country will identify with them.
	The change to a new system of local government finance will have two main effects including, first, a continued shift of resources from constituencies such as mine in the south-east to other regions. Secondly, a system has been created that seeks to disguise—[Interruption.] I hope that the Minister is listening, because that system seeks to disguise the unfairness that the shift causes in the provision of vital services by the councils that lose out.

Phil Woolas: I think that the hon. Gentleman was in the Chamber when the right hon. Member for Skipton and Ripon (Mr. Curry) confirmed that there had not been a shift in resources from constituencies such as the hon. Gentleman's to constituencies further north.

Richard Benyon: I will prove to the Minister that there has been a shift from areas such as West Berkshire. Whether those resources have gone north, south, east or west, I shall leave the Minister to work out, as his Department has contrived a very confusing system.
	My right hon. Friend the Member for Skipton and Ripon (Mr. Curry) is quite right—we cannot look at the issue properly if we include the schools money, and the figures that I will use are for non-schools grant. Many authorities receive two and, in some cases, three times as much grant per head as councils such as West Berkshire that do worst in the system. As if the situation were not iniquitous enough, some authorities enjoy annual increases far above those received by West Berkshire. Middlesbrough, for example, has received a 5.7 per cent. increase; Stockton-on-Tees, 4.9 per cent.; Hull, 4.8 per cent.; and Hartlepool, 4.2 per cent. West Berkshire, however, must make do with a below-inflation settlement of 2.1 per cent. In short, a system that is already grossly unfair has been made more unfair with each passing year.
	The predictable reaction to that unfairness from the Government is to claim that those disparities are simply a reflection of greater deprivation elsewhere, but that argument is flawed. If we use the indicator of average weekly income, the Government's own statistics show that average income in a relatively well-off area such as West Berkshire is 50 per cent. higher than in council areas with the very lowest incomes in the country. How can that disparity justify Government grant levels 300 per cent. higher in other areas?
	The change to the new funding system has hit West Berkshire and a number of other south-east councils particularly hard for another reason. For many years, West Berkshire council, along with neighbouring councils such as Wokingham, were short-changed by a system that imposed ceilings on grant levels. Although demographic trends meant that the Government calculated that West Berkshire required large increases in grant to meet service needs, those were curtailed to pay for grant increases to other councils. Last year, as hon. Members will recall, the grants ceiling was removed for one year. West Berkshire received an overall increase in grant of 11 per cent., and it began to offset the years of bad settlements that it had previously received. A year later, under the new system, West Berkshire is no longer at or, indeed, above the grant ceiling, but is on the floor, with a below-inflation increase in its non-schools grant of 2.1 per cent. How can a council be assessed as requiring a massive increase in grant one year, but receive a grant below inflation the next?
	I try not to be cynical, but one can understand why people ask if it is more than a coincidence that the funding system has been changed just as it was finally about to start to address long-term inequalities in funding for some authorities in the south-east, where the Labour party has virtually no presence.
	There is a final aspect to the changes in this year's funding system that should not go unnoticed. We live in the world of the relative needs formula. The effect of this change is to render an already complex and opaque system virtually unintelligible. That is helpful, if the system is designed to move resources from one area to another without any genuine justification or accountability. Despite half-hearted Government protestations to the contrary, the old system of formula spending share effectively set out what the Office of the Deputy Prime Minister thought local councils should spend in cash terms on various services.
	Not surprisingly, the old system produced some uncomfortable statistics for the Government. The last set of figures for social services FSS in 2005–06, updated for the last time in this year's release of information, showed that West Berkshire came 146th out of 150 authorities in the amount of funding the Government expected it to spend on social services per head. Effectively, the Government expected West Berkshire to provide social services by spending just £197 per head of population, compared with up to three times that sum in other councils.
	Clearly, that was always nonsense, brought about by the inequity of the funding system. West Berkshire has the same demographic pressures as other councils, with an ageing population, increased cases of dementia, and so on. The needs and unit costs of social services clients are not radically different because they live in West Berkshire rather than in inner-London or places further north. Why should services to some of the most vulnerable people in our society be underfunded by the Government simply because those people happen to live in an area which, by Government calculations, is moderately better off than other areas?
	The truth is that an elderly or disabled person in need of social services provision living in Newbury has just the same requirements as someone in a similar condition living in Newcastle, but the Government believe that my constituent is only a third as important as somebody living in another area. Unsurprisingly, the new system of relative needs formula provides no monetary statistics. The Government say that is because the old system was misrepresented, but it is precisely because the old system exposed such unfairnesses that it has been changed.
	There are two other areas that are worthy of consideration in such a debate. First, West Berkshire receives back far less in business rates than it contributes. That is another example showing how resources are shifted surreptitiously from one area to another. It is not a system that is understood by the electorate out there. Secondly, the people of West Berkshire have thankfully taken the only course of action open to them that can mitigate the effects of Government underfunding: they have elected a Conservative administration, which in its first year—[Interruption.]
	I hear a scoff from the Liberal Democrat Benches. The Liberal Democrats controlled that local authority, and they were happy to see the people of West Berkshire caught in a pincer movement between a Government who fiddled the funding and imposed the Chancellor's savage stealth taxes on them, and a Liberal Democrat authority that ramped up council tax year on year to pay for ridiculous spending and pet—[Interruption.] I certainly blame both, because I had to live under them for too many years. I am happy for the Liberal Democrats to see our figures.
	The people of West Berkshire have now elected a Conservative administration which, despite the appalling settlement that it has received, has identified pensioner poverty as a major problem that is being exacerbated by council tax. The administration wants to keep council tax down. It has recognised the effect of council tax on young families as well. It has managed to achieve a record settlement, even in the climate that the Government have created. I am enormously proud of the Conservative administration running West Berkshire council. It is doing its best to provide quality services within a system of Government grant that is unaccountable, whose logic is untenable and which creates a disparity of funding that is totally unfair.

David Howarth: I want to raise two topics with the Minister: first, the supporting people programme, the grant for which has fallen by 1.7 per cent. nationally; and secondly, the transparency and rationality of the grant formula.
	As the hon. Member for Brentwood and Ongar (Mr. Pickles) said, the supporting people programme is admirable. Its aim is to help people to live independent lives at home. They include those who have been homeless and rough sleepers, ex-offenders, people with disabilities, people at risk of domestic violence and people with drug and alcohol problems, as well as several other vulnerable groups such as Travellers and people with HIV and AIDS. The programme provides funds in order to, for example, help people to access their correct benefit, ensure that they have the right life skills to maintain tenancies and provide advice on home security. Finding a place for someone to live is often not enough: unless they are given help in maintaining a new and stable lifestyle, they may be in danger of slipping back into their former lives.
	The problem is that funding for the supporting people programme was cut last year, is being cut this year and looks as though it will be cut again next year. The origins of the cuts lie in the Treasury's belief that the programme is too expensive. However, the cost to the public purse, through the health service, the criminal justice system and the benefits system, of failing to reintegrate vulnerable people is also very high.
	I understand that the Government are consulting about the future of the supporting people programme, and I hope that they will decide to give it the funding that it deserves. I have two comments for Ministers to consider in the course of that consultation. First, as the hon. Member for Wigan (Mr. Turner), said, there is an interaction with health spending. That is particularly true of mental health spending. There is a serious problem with the provision of mental health services in many areas. In my own constituency, cuts of 13 per cent. in mental health funding have been proposed. Some of those cuts—to day centres, for example—affect precisely the same people as cuts to the supporting people programme. All I ask is that the Department of Health and the Office of the Deputy Prime Minister work together to ensure that these most vulnerable people are not hit twice by separate Government policies.
	Secondly, there is an interaction with spending on homelessness. I note from the figures before us that the special grant for tackling homelessness is rising just as the special grant for the supporting people programme is falling. That rise is welcome in itself, but Ministers should remember that the homeless are among the most important of the groups that are helped by the supporting people programme. I would like an assurance from the Government that they are not merely shifting resources around from long-term help in supporting people to short-term help for the homeless. The supporting people programme is a crucial part of dealing with homelessness. The policy of moving people through gradations of housing until they are able fully to support themselves is absolutely right, but it will not work unless people are helped to stabilise their lives. Emergency services for the homeless usually win more headlines, but long-term success depends on such programmes, and they need to be maintained.
	The other issue that I want to raise is that of the lack of transparency in the system of calculating grants for local authorities. In December, the Minister said that the settlement was purely cash based and did not involve any assumed council tax levels for each authority, as in the past. That caused much amusement in local authority circles. No system for the allocation of grant to local government can be purely cash based, because all systems start with the national control total and work backwards. The formula is a way of distributing a fixed budget. Anything else would cause chaos in central Government finances. If one proceeds as the Government have, all that one does to get the figures to add up is to introduce a bit of trial and error by running the formula repeatedly, using slightly different figures, until the right totals appear.
	The Government's purpose in shifting to the new system appears to be purely to avoid having to publish the assumed council tax figures for each local authority. They complained that the figures were misunderstood and that local authorities were using them for inappropriate purposes. The Minister mentioned standard spending assessments, which were misused. That is true but they were mainly misused by central Government. The SSA constituted a method of working out the share of the national total but it was used to criticise local government for spending too much or too little.
	It was the other way around with assumed council tax. The assumptions were understood only too well and the Government appeared desperate to disguise them. To do that, they produced a system that is, according to the Chartered Institute of Public Finance and Accountancy, more complex and much less transparent than the previous system. However, it is not clear that the Government have even succeeded in hiding their assumptions about council tax amounts and the way in which they calculated the figures. Finance officers in councils throughout the country are busy working out what the Government's assumed council tax for their council must have been.

Phil Woolas: They would anyway.

David Howarth: Yes, but there is a question of wasting their time. The attempt to hide the assumed council tax in relative shares of spending does not work because the Government ultimately have to publish absolute figures for the total grant and a specific negative amount to represent the total national council tax base. That means that it should be possible to reverse-engineer the formula to return to the assumed council tax levels. The Government should save people the time and effort of working that out and simply publish the figures, which they used to do.
	The other, perhaps more serious, problem with the formulae as they are currently presented is that they mix technical assessments with political judgments. Whether a formula successfully predicts the amount of need for a specific service or the cost of providing it in different areas is a technical matter—a sort of exercise in amateur sociology and economics that can be checked against the research. However, the balance of funding between different blocks—hidden in the "basic amounts" in the formula—and, I suspect, different sorts of council, is a political decision. The Minister is right to say that there is no bias in different regions except accidentally at the end, but I stress that the decisions about the balance of funding between different sorts of council are political.
	I believe that we should be considering two reports, not one. There should be a technical report that provides evidence for a specific way of predicting need and cost, and a political report that gives the Government's reasons for opting to support particular services and sorts of council.
	A Government who even suppressed the assumed council tax level are unlikely to want more openness in the rest of their activities in that field. However, a Government who were committed to a clear and open debate about their priorities would welcome openness.

David Amess: We live in an unjust country. The Government are unjust and I blame local government's powerless state on the Labour leader. Since he took power in 1997, he has shown little or no interest in local government.
	What is the point of anyone becoming a councillor nowadays? The centralising Government tell local authorities everything that they should to do. They tell them how much to spend and what they can raise. Central Government direct every facet of local government. What on earth is the purpose of anyone standing for local government?
	A deputation from Southend council met the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Poplar and Canning Town (Jim Fitzpatrick), last month to explain to the Government Southend's serious financial predicament and to try to get more help from him. As the Minister knows, when the national census was conducted, 20,000 people in Southend were left off it. That means funding for 20,000 fewer people. The Minister is always courteous when he meets us and has been sympathetic, but my colleagues and I are not going to shut up and wait until 2011 for something to be done.

Philip Hollobone: In Northamptonshire, we have the reverse problem. The population will increase massively as a result of the Office of the Deputy Prime Minister's growth area agenda, but the population assumptions in the local government finance settlement are based on historic census data and do not include the projections provided in the growth area assessments.

David Amess: There we are; I was exactly right when I said we live in a very unjust country.
	We have a serious situation in Southend, with 20,000 people left off the census. We cannot wait until 2011 for that to be addressed. The Minister also knows that Southend pier has been burnt for the third time, that we are suffering cliff slippage and that Southend, West—the constituency I am proud to represent—has the most people in the country aged between 100 and 112.

Nicholas Soames: All good Tories.

David Amess: They certainly are good Conservatives.
	All that brings huge financial difficulties. At the meeting with the Minister's colleague, we brought to his attention the fact that Southend had received a 2 per cent. increase while the average across the country was 3 per cent. We also brought to his attention the fact that if the local authority increased local council tax by more than 5 per cent., capping would take place. If we follow the Minister's instructions, Southend will have to make cuts of £11 million—on top of £25 million of cuts over the past five years.
	I end with a gentle warning to my hon. Friends. It is normal when one takes a deputation to a Minister asking for more money not to expect any change. But this settlement takes the mickey. Following our delegation—my hon. Friend the Member for Rochford and Southend, East (James Duddridge), members of Southend council and me—the grant was not left alone; it was actually cut further. As a result of our delegation—

Phil Woolas: indicated dissent.

David Amess: The Minister shakes his head, but as a result of our deputation—my hon. Friends must bear this in mind, until we enter office—we have actually had our grant cut by £34,000. That really is taking the mickey. I am desperately disappointed with what the Government have done.

Andrew Pelling: I shall keep my remarks short as I know that the Minister wants to reply.
	Despite what the Minister had to say, quite a few Opposition Members have spoken on behalf of authorities whose allocation of moneys is on the floor. I should not want to cut across what the hon. Members for Wigan (Mr. Turner) and for Barnsley, Central (Mr. Illsley) had to say, but I assure the House that in London, having a social services grant on the floor does not necessarily mean living a life of luxury. Within my local authority there is, unfortunately, a need to close down an industrial organization that has given jobs to 85 disabled members of the community. There has also been the acceleration of closures of old people's homes. The Minister and my hon. Friend the Member for Mole Valley (Sir Paul Beresford) raised the issue of affordability. That is an important issue, especially within the context of London.
	Within my constituency, there was a recent analysis by Barclay's that showed that the real standard of living—when account is taken of the costs of living in London—in Croydon, Central is within the bottom 100 constituencies in England and Wales. The neighbouring constituency of Croydon, North is within the bottom 30. Careful consideration must be given to the allocation of moneys to constituencies in outer London, which are showing great signs of a decline in the quality of public infrastructure. That is recognized by the Mayor of London.
	Within Croydon, there are real issues with specific grants that go into the overall revenue settlement; for example, concessionary fares and importantly, for Croydon and Hillingdon, unaccompanied asylum-seeker youngsters.
	Briefly, I pay tribute to the London borough of Sutton, which is controlled by the Liberal Democrats. There is a desire there to work on a cross-party basis to lobby on behalf of that borough's interests. The approach taken was a great success for the borough in terms of achieving its position in the area cost adjustment in falling within a west London council definition. Unfortunately, the London borough of Croydon has not fallen within that process. If I had some criticism of the Labour authority in Croydon, it would be its unwillingness to operate in a bipartisan approach to the Minister that involves both the Labour and Conservative parties. That is both before my election to the House and afterwards.
	I suppose that, on a party political point, that will not be a problem for me after the coming local elections. However, it is important to take a constructive approach. When it comes to area cost adjustment in terms of west London councils on the provision of education, children's services and other elements within cost adjustment, we find that the boroughs are being funded at a rate of 6 per cent. higher than other boroughs within outer London. It strikes me that that is an unjustifiable effect of the operation of the ACA within the funding formula.
	Overall, it will have cost Croydon council £40 million relatively in funding over the three-year fixed period that has been locked in by the Government. There seems also to be a contradiction in funding within London on schools. The average funding for secondary schools within Croydon is £3,300 per pupil whereas in many London boroughs the funding will be £5,000.
	I concede that there have been problems within Croydon, given its fascination for council tax referendums that allowed the opportunity for increases of 2 and 3 per cent. in the run-up to the previous local elections. Obviously, that led to a great deal of trouble for the local authority in increasing its council tax by 27 per cent. immediately after the local council elections. Unfortunately, that will operate as a distinct handicap for the Labour party in trying to retain control of Croydon council at the upcoming elections. The residents of Croydon will easily remember 27 per cent.
	Croydon is going through dynamic change. Many of the wards within Croydon have the highest populations of black and ethnic minority communities, and it is important that we serve those communities. The political agenda within London, understandably within the context of the Olympics and London 2012, has been to concentrate resources on the development of the Thames Gateway area.
	Funding that comes to London through learning and skills councils also discriminates strongly against southern London. In the review of area cost adjustment for subsequent years, I hope that the Minister will give serious consideration to the need to take account of the real costs of operating in London. Boroughs such as the London borough of Croydon require greater equality of treatment. The director of finance of the London borough of Croydon recently said that we operated within an ACA that put us in a valley of payments, or low point, compared with neighbouring Bromley and Sutton.
	Serious consideration should be given to the real dynamic changes that are taking place in Croydon's population. As many other hon. Members said, especially the hon. Member for Hastings and Rye (Michael Jabez Foster), we must realise the problems that are caused when areas with distinct deprivation are not well supported through the overall allocations. That problem applies especially to the London borough of Croydon because its northern parts and some areas of Croydon, Central, which I represent, have many facets and styles that are similar to those of inner-London areas.
	Unfortunately, as the Minister will be aware, there was recently a great deal of publicity about the fact that our main station in Croydon has the highest rate of reported crime of any outer-London rail station. That in itself is an indication of the some of the decline that has taken place in the London borough of Croydon, which ought to be addressed through the future allocations of resources to Croydon. When the Minister winds up the debate, I hope that he will provide us with some positive remarks about how the area cost adjustment for Croydon will be reviewed in future years.

Phil Woolas: With the leave of the House, Mr. Deputy Speaker, I shall reply to the debate.
	I thank hon. Members on both sides of the House for their contributions to the debate and will try to respond to their points about the settlement. Over the past few weeks, I have been keeping a private tally of the most ingenious arguments that hon. Members have made for why their constituencies are being unfairly treated and good contributions to that competition were made this evening. Hon. Members representing some of the wealthiest areas in the country said that they should be rewarded for living in wealthy areas. Conservative Members said that money is being given to northern Labour areas, while we heard from Labour Members representing northern areas that money is being given to southern Conservative areas; I make no comment about that.
	The winner of the competition has to be the hon. Member for Southend, West (Mr. Amess), who complained that the delegation that he led to meet Ministers from the Office of the Deputy Prime Minister resulted in a reduction in his area's grant. I am highly tempted to save that one until the next general election and put out a performance review grant. Unfortunately the hon. Gentleman is not in the Chamber, but the truth is that the reason for the changes was entirely due to statistics. I am well aware of Southend's difficulties due to the fire at its pier and have previously commended the hon. Gentleman on his campaign about population statistics. I referred to that general issue during my opening remarks when I said that the Government rely on the most robust figures available, which are those from the Office for National Statistics.
	The hon. Gentleman also criticised the Government for using historical trend population figures. May I re-emphasise the fact that the changes that we have made in the settlement take account of future projections, as well as historical changes, to take on board points made by hon. Members on both sides of the House during the consultation and recent meetings?
	The hon. Member for Southend, West said that his council was implementing cuts of £11 million. I wonder why Opposition Members have such short memories. A cut is a reduction in the cash available to spend on services; a cash reduction or a reduction after inflation, if one wants to define it like that. A cut is not a smaller increase than was hoped for. [Interruption.] Opposition Members, who are incredulous at that point, need to get back to the days when they were a party of sound finances. It is not credible to stand before the electorate in May, in the context of increased grants from the Government year on year, over 10 years, and complain about cuts. That is just not tenable.
	That is not to say, as I said in my opening remarks, that the Government have not recognised that there are pressures on councils, particularly as a result of an increasing elderly population, increases in the costs of waste recycling and increases in other areas, above the net new burdens identified by the Local Government Association and ourselves, which were provided for in this settlement. Opposition Members cannot have it both ways. They cannot say that the reductions in services in some specific areas of council expenditure are due to this settlement; they are not, and it is not credible for them to argue that point.

Eric Pickles: Surely the hon. Gentleman has something better to offer us than "Yah boo sucks". Surely he recognises the growing pressures and burdens on local authorities. Things are closing down from Rye to Rugby. Things are closing down from Lancaster to Surrey. Things that were funded last year are not being funded. Is it all just a conspiracy to make the hon. Gentleman look bad?

Phil Woolas: With respect, the hon. Gentleman repeats the mistake that I just warned him against. I am more than happy that he carries on doing so. He needs to listen to his own electorate. They will not put up with what they see as public sector profligacy. This Government have provided above-inflation increases and investment in local government for 10 years. That is a fact that he cannot deny, and no amount of Central Office press releases will change that. It is also the case that the Local Government Association, very responsibly led by a distinguished ex-council leader in Sir Sandy Bruce-Lockhart—not a Labour member, but a Conservative councillor speaking on behalf of all councils—entered into a process with the Government to identify any net new burdens. We did that, and we reached agreement on it. We also identified pressures on local councils over and above inflation.
	There are two points that the House has to recognise. The first is that those pressures exist for central Government as well. They do not stop at the county border. The pressures from the increased elderly population, the demands on health and other services, exist for central Government, and it is incumbent on us to ensure that resources are fairly distributed and that budgets balance. One cannot then say that the pressures on councils are the fault of the settlement; they are not. Where there are real pressures, and we have acknowledged them, it is because of the real world.
	If the hon. Gentleman wants to intervene again, I will allow him to do so briefly because I will be fascinated to hear what he has to say. My second point is that if local government wishes to be a partner in governance of this country, it has to accept its responsibility in balancing budgets. It is to no one's gain for it to say, month after month, year after year, in the context of a 79 per cent. real terms increase in council expenditure, that the Government should provide more; from where?

Eric Pickles: Given the nearly 80 per cent. increase in council tax, how can the hon. Gentleman lecture anyone about profligacy when his own Department has wasted £168 million on consultants and when the level of financial competence in the Department is a disgrace? If the Office of the Deputy Prime Minister cannot run itself, how can the Minister possibly lecture others?

Phil Woolas: I would make two points in response to that intervention, which notably failed to answer the challenge that I put to the hon. Gentleman. My first point in response to his allegations is that, when he sees the figures on the Gershon efficiency savings, he will find that my right hon. Friend the Deputy Prime Minister's Department is leading the field, along with the Department of Health, in that regard. Secondly, I challenge him again to tell the House what his policy is. If he is saying that a 79 per cent. above-inflation increase in grant is insufficient, and that he does not wish to see above-inflation increases in council tax, what is his policy? The fact is that there is no policy on offer from the hon. Gentleman, unlike the hon. Member for Brent, East (Sarah Teather), who has an alternative.

Brian Iddon: Is not the policy of the hon. Member for Brentwood and Ongar (Mr. Pickles) quite clear? He mentioned it earlier when he was whingeing about the dedicated schools' budget. That is where the money would come from, as it always has when the Conservatives have been in power.

Phil Woolas: My hon. Friend makes a valid point.
	The hon. Member for Brent, East once again blamed the system for the increases in council tax. She acknowledged the increase in grant, but criticised the increases in council tax and blamed the balance of funding for the problems. The problems faced by councils—hers in particular; I have met a delegation from her council—are to do with the real-world pressures of an increased elderly population, increased costs of waste disposal and recycling, and increased costs as a result of other demographic changes. Those pressures cannot be wished away by a change in the formula or in the balance of funding. They can be, and are being, addressed by a strategy, agreed in conjunction with the Local Government Association, of addressing those underlying causes.
	Both the Opposition parties argue that Her Majesty's Government should recognise a separate level of inflation for local councils, over and above the level for central Government expenditure. That is not a tenable policy; it is economically illiterate. Were we to adopt an inflation level for local government that recognised the demands placed on local government, it would become a self-fulfilling prophecy, and people would be back again next year arguing for even more money. The public would, quite rightly, not accept that.

Mark Hunter: Will the Minister reflect on his use of the word "profligacy" in relation to local government? Is that really his view? Does he not think, with hindsight, that councillors of all parties up and down the country might find his use of the word offensive in that context? If he does think that his use of the word was valid, will he tell us which services currently provided by councils should no longer be provided?

Phil Woolas: I chose my words deliberately, as hon. Members would expect, and I expected such a response from Opposition Members. The hon. Gentleman cannot have it both ways. He cannot blame the Government for the pressures on local councils while recognising the 79 per cent. above-inflation real-terms increase in grant that councils have received. If he wants me to enter into a debate about the council of which he was leader, I shall be happy to use the word that he accused me of using.

Mark Hunter: It is a four-star council.

Phil Woolas: It is indeed. I might also ask the hon. Gentleman to tell us what the staff complement figures are now and what they were 10 years ago. The silence is illuminating.
	The hon. Member for Croydon, Central (Mr. Pelling) asked us to look again at the area cost adjustment. I announced in the debate, and in a statement on 5 December, that the geography was certainly something to be looked at following arguments presented across the political spectrum. I cannot, of course, offer the hon. Gentleman a commitment to solve the problem.
	My hon. Friends the Members for Wigan (Mr. Turner), for Barnsley, Central (Mr. Illsley) and for Tyne Bridge (Mr. Clelland) made important points about the impact of "damping" and the need, as they saw it, for a timetable to reduce it. I am grateful for the positive way in which they raised those issues. It confirms the falsehood of the accusation that this is a new distribution formula heavily biased towards Labour areas. No doubt my hon. Friend the Member for Wigan sees some irony in that, but I am grateful to him for acknowledging that he has some sympathy for the floor as a policy. The floor relating to non-schools expenditure on education authorities provides the protection that he wants. Authorities such as his and mine would have been in severe difficulties without the double floor applying to the formula spend element and the overall grant.
	The right hon. Member for Skipton and Ripon (Mr. Curry) raised points about wider Government policy and priorities in education, health and development. He acknowledged that while this was a tough settlement it was inflationary on the whole, and was good enough to praise the Government for their increases in other areas. The hon. Member for Mole Valley (Sir Paul Beresford) presented—as he often does—the argument against the full resource equalisation in the settlement. My hon. Friend the Member for Hastings and Rye (Michael Jabez Foster) welcomed the floor. He criticised his county council's priorities, while recognising the difficult decisions that it had to make. He welcomed the 5.8 per cent. settlement, and the 7.2 per cent. settlement for Hastings borough council.
	This local government settlement will ensure above-inflation increases in grants for 10 years running. It provides stability and predictability through a two-year settlement, and builds on the policy of investing in local services. It does so in a fair way, recognising the needs of different types of authority across the country in a manner that is not politically partisan, despite the accusation that has been made. I commend it to the House.
	Question put and agreed to.
	Resolved,
	That the Local Government Finance Report (England) 2004–05: Amending Report 2006, HC 856, a copy of which was laid before this House on 31st January, be approved.
	That the Local Government Finance Report (England) 2005–06: Amending Report 2006, HC 857, a copy of which was laid before this House on 31st January, be approved.
	That the Local Government Finance Report (England) 2006–07: Amending Report 2006, HC 858, a copy of which was laid before this House on 31st January, be approved.
	That the Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2006–07, HC 859, a copy of which was laid before this House on 31st January, be approved.— [Mr. Woolas.]

DELEGATED LEGISLATION

Mr. Deputy Speaker: I propose to put together the remaining motions relating to delegated legislation.
	Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

Constitutional Law

That the draft Charities and Trustee Investment (Scotland) Act 2005 (Consequential Provisions and Modification) Order 2006, which was laid before this House on 6th December, be approved.
	That the draft Gaelic Language (Scotland) Act 2005 (Consequential Modifications) Order 2006, which was laid before this House on 6th December, be approved.
	That the draft Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 2006, which was laid before this House on 6th December, be approved.

Industrial and Provident Societies

That the draft Friendly and Industrial and Provident Societies Act 1968 (Audit Exemption) (Amendment) Order 2006, which was laid before this House on 12th December, be approved.
	That the draft Community Benefit Societies (Restriction on Use of Assets) Regulations 2006, which were laid before this House on 12th December, be approved.

European Communities

That the draft European Communities (Definition of Treaties) (Cooperation Agreement between the European Community and its Member States and the Swiss Confederation to Combat Fraud) Order 2006, which was laid before this House on 19th December, be approved.—[Joan Ryan.]
	Question agreed to.

COMMITTEES

Science and Technology

Ordered,
	That Dr Ian Gibson be discharged from the Science and Technology Committee and Mr Jim Devine be added.

Defence

That Mr Desmond Swayne be discharged from the Defence Committee and Mr Adam Holloway be added.—[Joan Ryan, on behalf of the Committee of Selection.]

SWIMMING FACILITIES (DISABLED PEOPLE)

Motion made, and Question proposed, That this House do now adjourn.—[Joan Ryan.]

Natascha Engel: I submitted my request for an Adjournment debate on swimming facilities for disabled people in order to highlight a specific issue: the imminent closure of a swimming pool in Chesterfield, which will leave many people who live in Staveley, in my constituency, without anywhere to swim. But the campaign to keep Middlecroft leisure centre open seems to have touched on issues that go way beyond the local. To put the Minister in the picture, Liberal Democrat-led Chesterfield borough council has announced that it will close Middlecroft swimming baths at the end of this May. They will be replaced by a fitness centre a couple of miles down the road—a centre that has no swimming facilities. The council is talking about providing a new swimming pool in the area, but there are no definite plans.
	The fact is that Middlecroft will lose its pool and residents will have nowhere to swim. Those residents—angry parents and anxious elderly and disabled swimmers—have formed the Middlecroft leisure centre action group. Their slogan—"You can't learn to swim in a gym"—reflects the fact that in a rural area and a coalfield community such as ours, the nearest swimming pool is many miles away and in practice is not accessible, especially for those who do not have a car. The national curriculum now specifies that all children should be able to swim 25 m by the age of 11, so this closure will put a huge burden on Derbyshire county council, which will have to bus children from school to swimming pool and back again. That time could better be spent learning to swim, and that money could better be spent on sport or education.
	However, the real reason that I asked for this debate is the plight of the Spireoaks swimming club for disabled swimmers, which is based at the Middlecroft swimming baths. Spireoaks is not huge. It has some 20 members with a wide range of disabilities—from cerebral palsy, autism and Down's syndrome to epilepsy. It is run by the incredibly dedicated and determined husband-and-wife team of Dorothy and Brian Wibberley. They set up at Middlecroft more than 11 years ago and have enjoyed success after success. Most recently, 16-year-old Tom Harrison, who has a brain injury, won bronze at the "Double Dutch" open championships in Holland. Dorothy and Brian were delighted when they heard that the 2012 Olympics and Paralympics are to come to the UK. The club planned to have at least one Paralympic medal winner from Middlecroft and Staveley.
	Despite Dorothy and Brian's 11 years of service, Chesterfield borough council did not even bother to write to them to explain that the pool is to close and that they will lose their training ground.

Jim Devine: Such behaviour by the council is indeed unacceptable, but does my hon. Friend not find it even more embarrassing that there is no Liberal Democrat representation in the House for this important debate?

Mr. Deputy Speaker: Order.

Natascha Engel: rose—

Mr. Deputy Speaker: Order. The hon. Lady must sit down. Remarks such as those that the hon. Gentleman just made are generally disapproved of. This is an Adjournment debate—the personal property of the Member who has raised it—and it entitles the hon. Lady to a ministerial response; it is not an occasion for party political matters. Whatever the content of the speech, it is the hon. Lady's, and the presence of other hon. Members in this House is an irrelevancy.

Natascha Engel: Thank you, Mr. Deputy Speaker.
	I cannot understand the massive lack of ambition that leads to a local council closing a swimming pool shortly after the announcement that we will be hosting the Olympics and Paralympics. What message does that send to local people in Staveley and Chesterfield? The UK's Sydney Paralympics swimming team came home with 62 medals—out of a total of 131 medals awarded. We in North-East Derbyshire want to build on that record. We want to encourage able-bodied and disabled children to be the swimmers and winners of 2012, but how can we even think of competing if Chesterfield is to close its swimming baths?
	It is not as though Chesterfield is flooded with pools. Once Middlecroft is closed there will be only one other pool in the borough, and that is already heavily oversubscribed. We should contrast this approach with that of North East Derbyshire district council, which manages four 25 m pools and plans to upgrade them, rather than to close them.
	However, the context of this debate is wider than my constituency and Chesterfield: it is about health, wealth, leisure and community. As Duncan Goodhew says:
	"Swimming is the best all-round sport for our health. It is the least discriminating, certainly in age and ability and it has the highest appeal in the nation."
	He is not joking. More than 22 per cent. of the nation swims at least once a month. It is the single most popular sport in the country. When Tessa Jowell, the Secretary of State for Culture, Media and Sport, visited a school last week and asked the children—

Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Lady again, but it is not the practice to refer to other right hon. and hon. Members by name. They may be referred to by constituency or, in the case of the Secretary of State, by the office that she holds.

Natascha Engel: I apologise, Mr. Deputy Speaker. When my right hon. Friend the Secretary of State visited a school last week and asked the children to which sports facility they would most like to have access, the answer was, of course, swimming pools. Children, including those in Staveley and Middlecroft, love swimming. No matter how poor their parents are, they can afford the £2.30 for a swim.
	There is also the very serious issue of water safety. Learning to swim will obviously lead to fewer people, especially younger people, drowning. That is of particular concern in Middlecroft. Once the pool is closed, the nearest water will be in the Poolsbrook country park. Come the summer, kids—swimmers and non-swimmers—will jump straight into unsupervised lakes and ponds. Their parents are right to be worried.
	If we can keep Middlecroft open and carry on getting kids to swim from an early age, the health benefits will be massive. They will be less likely to suffer from heart disease or strokes, and they will be far less likely to become obese. In a high-deprivation area like Staveley, there is also a high level of drug abuse. It does not take a genius to work out that involvement in sports will make it less likely for a child to get involved in crime and drugs. As we have already established that swimming is the most popular and most accessible sport of all, is it not irresponsible to be closing down a pool in Middlecroft?
	Middlecroft is not rich, but it is a tight-knit community and the swimming pool is more than just a leisure centre. It is where people meet and socialise. It is the heart of the community. The pool is getting a bit old and everyone would probably rather have a 50 m competition pool with wave machines and top-of-the-range gym facilities. The pool may not be perfect, but it is all there is.
	My right hon. Friend the Minister for Sport was kind enough to come to Middlecroft on Friday to receive a petition with 2,500 signatures demanding that the pool stay open. He was amazed that the council is closing a perfectly good swimming pool. The problem is that swimming pools, their location, and whether they stay open or are closed, are in the gift of local authorities. But swimming pools are too important for local authorities like Chesterfield to make irresponsible decisions on closure.
	The London Pools Campaign is a group formed from six different swimming bath campaign groups. In Derbyshire and other more rural parts of the country, forming umbrella pool campaign organisations is far more difficult. In fact,the issues are arguably far more difficult, because a swimmer in Staveley does not have the option of jumping on the tube to another pool. However, the proposals I make tonight owe a lot to the London Pools Campaign and to David Sparkes, the chief executive of the Amateur Swimming Association.
	The Government have no power over local authority decisions on pools, but they do have a responsibility to ensure a strategic policy on pools, and local authorities should be forced to sign up to it. The strategy should be co-ordinated at city or county level, with a proper inventory of facilities. It should ensure that everyone has fair access to swimming, especially children, disabled people and women. We should aim for free swims for under 16s, over-60s and disabled people. We should ensure that opening times are convenient, prices are affordable, crèche facilities are available and that new pools are built where they are most needed.
	Chesterfield borough council should not be allowed to close any pool without having first opened a suitable alternative swimming facility. If that is not possible without releasing funding from the sale of the old pool, the Government should look into providing bridging loans. No one has a problem with closing pools if a new one is opened first. Everyone has a problem if a pool is closed and replaced by a small fitness room, because children cannot learn to swim in a gym.

David Lammy: I congratulate my hon. Friend the Member for North-East Derbyshire (Natascha Engel) on her success in securing this, her first Adjournment debate. As my right hon. Friend the Prime Minister said in the House the other week, investment in community facilities should be a priority. The Government are committed to increasing sports participation, especially for disabled people, and swimming is one of the three most popular forms of physical activity for that group. The decision that my hon. Friend describes is therefore all the more surprising.
	Access to good-quality sporting provision, including swimming pools, is an essential part of enabling people to lead healthier lives and to participate in sport. Concern about that issue has been reflected in the debate tonight. One of my Department's key targets is to increase participation in sport by priority groups, including disabled people, by 3 per cent. by 2008. However, one of the obstacles preventing people from taking part in sport is the lack of good-quality facilities, which applies as much to the disabled as to other sections of the community. Our aim is that
	"most people should be no more than 20 minutes travel time from a good quality, multi sports environment, such as schools, sports clubs and leisure centres".
	There is a challenge. There is a clear deficit in funding for sporting facilities, alongside the failing condition of existing stock. The average age of local authority facilities is about 25 years. The national stock of sports centres requires about £550 million to bring their condition up to a good acceptable standard, even without upgrading to take account of modern trends in sports participation and current demand.
	The Government are taking a number of positive steps to address those issues. All over the country, responsible local authorities are joining us in the crusade, not presenting road blocks. More than 4,400 swimming facilities in England are open to the public; 72 per cent. are owned by the local authority or education sectors and more than half are pay and play facilities. Since 2004, 131 pools have opened across the country. More local authority pools have opened than closed.
	Since 1997, the Government and lottery distribution bodies have invested more than £3 billion in physical activity and sport, and £249 million of lottery investment has gone to swimming—the largest amount given to any sport. Local authorities will be investing about £1 billion in developing sports services and facilities over the next three years.
	We need a strategic approach, however. The problem is that many pools are old; they were built 25 years ago, are in the wrong location and cost a lot to keep open. We are challenging local authorities to put sport and swimming provision at the heart of what they do. For the first time ever, we will be monitoring local authority performance in sports provision through the comprehensive performance assessments, and we are committed to supporting local authorities in their efforts.
	Before I turn to my hon. Friend's concerns, I want to set out the overall position. Swimming is one of the three most popular forms of physical activity for disabled people. According to research, disabled people regularly say that they would like to do more swimming. It is essential that we do all we can to provide opportunities for them to participate. Obligations under the Disability Discrimination Act 1995 require all service providers to take reasonable measures to remove, alter or provide reasonable means of avoiding physical barriers to accessing and using their premises. The Disability Rights Commission has statutory duties to monitor and keep under review the implementation and enforcement of the DDA and to advise the Government on the operation of the Act.
	In August 2005, the Minister for Sport, my right hon. Friend the Member for Sheffield, Central (Mr. Caborn) wrote to all local authorities reminding them of their responsibilities under the Act in the context of leisure and tourism facilities. In addition, across central Government, we know that many other organisations are involved in trying to improve the range and quality of swimming opportunities available to disabled people. For example, the English Federation of Disability Sport—the national body responsible for developing disability sport—receives more than £1 million per annum in funding from the Exchequer through Sport England.
	A number of local authorities have introduced free or discounted swimming for specific groups, including people with disabilities. It is important that, as local authorities assess where their sporting facilities, particularly swimming facilities, should be located, they have regard to deprivation and the context for poor people. It is also important that they can develop to those facilities at reasonable cost and in a reasonable time. I hope that that assessment is being taken seriously in Chesterfield.

Dennis Skinner: Bolsover is next door to Chesterfield, and we were promised a swimming bath. The lottery people were going to provide some of the money several years ago. We have not got a swimming bath in Bolsover. We would love to have one. We will help those people in Chesterfield if we get one. Will the Minister have a word with the people who run the lottery and the Minister for Sport to see whether we can get that swimming bath back on the road again? The money could be there if we got some from the lottery.

David Lammy: I had a little feeling that my hon. Friend might raise that issue—he has done so in the past—so I tapped my right hon. Friend the Minister for Sport on the shoulder this morning and asked him what was happening in Bolsover. He is happy to consider the proposal with the lottery providers and to take it forward, but he told me that it is important that the people in Bolsover come forward with a business case.

Dennis Skinner: They have done that.

David Lammy: If my hon. Friend feels that that has been done recently, I will bring that to my right hon. Friend's attention in the next few days.
	In the light of all that has been said, the situation in Derbyshire is serious, and the Government are monitoring it. I have heard what my hon. Friend the Member for North-East Derbyshire said, and I am strongly of the view that there should be no diminution in services for the people of Derbyshire. It is clearly important that the council have regard to the existing facilities that people rely on, and the gap that will be created if the council moves to any new arrangement. My right hon. Friend the Minister for Sport visited my hon. Friend's constituency on Friday. He takes the situation seriously, and he is monitoring it. He intends to go back to the constituency, because he joins my hon. Friend in the concerns that she has raised.
	I have been informed by the council that the pool in Staveley needs to close for health and safety reasons and that it has offered to provide alternative facilities, but in considering any alternative, it must bear in mind the concerns that people have been raising, such as their ability to travel the distances to other facilities and, particularly, the concerns of the disabled in the area.

Natascha Engel: The borough council has said that it will provide alternative facilities, but the problem is that once the pool has closed, people will not have a swimming facility for a number of years, and access to the nearest alternative facility is not good enough. How can we ensure that the pool does not close in the first place, until an alternative has appeared?

David Lammy: My hon. Friend has raised the issue at the highest level, and the Prime Minister saw fit to comment on it last week. The Minister for Sport has visited her constituency. The Government are committed to sport. More local authorities are opening facilities than closing them. On which side of the debate are my hon. Friend's colleagues in another party? They need to contemplate that decision in the days ahead. No doubt constituents will look at that future offer, and if there is no such offer they will go in a different direction, for which I would applaud them.
	Swimming remains one of our major success stories at Paralympic level. It is especially important for the disabled, many of whom look forward to practising, training and being involved in the Paralympic games. Our competitors at the Paralympics won 62 medals at Sydney, of which 15 were gold, and 52 in Athens, of which 16 were gold. That placed the UK at the top of the ranks for swimming, with only China achieving more medals in the pool. That is why hon. Members raise the subject, why our constituents care about it and why local authorities are responding to them. This country should be proud of its record. To maintain and improve it, it is important to invest in facilities so that we have first-class athletes, and young people can take up the sport of choice that they say they prefer above all others.
	We are under no illusions about the scale of the challenge ahead as we try to ensure that we have facilities fit for the future, which will support our elite athletes. As I have outlined, however, there are many positive messages across the country about swimming, in particular swimming for disabled people. We have good facilities and, moreover, a talented and aspiring generation of disabled swimmers. We need to do everything we can to encourage more people to follow that example. That has to start with local authorities, including the one in Derbyshire, ensuring that there is good local provision that meets the needs of all sections of its communities.
	I thank my hon. Friend for obtaining this important debate. I hope that political colleagues will take what has been said seriously and that her constituents benefit from first-class swimming facilities without the pause in provision that it appears others want them to experience.
	Question put and agreed to.
	Adjourned accordingly at three minutes past Eleven o'clock.